nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2018‒02‒19
twenty-one papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Property rights and transaction costs: The role of ownership and organization in German public service provision By Friese, Maria; Heimeshoff, Ulrich; Klein, Gordon
  2. Misallocation and Aggregate Productivity across Time and Space By Diego Restuccia
  4. Productivity and health : alternative productivity estimates using physical activity By Akogun,Oladele B; Dillon,Andrew S.; Friedman,Jed; Prasann,Ashesh; Serneels,Pieter Maria
  5. Regulating Mismeasured Pollution: Implications of Firm Heterogeneity for Environmental Policy By Eva Lyubich; Joseph S. Shapiro; Reed Walker
  6. Assessing the Competitiveness of the Metalworking Sector By João Marinho; Pedro Carvalho
  7. Changing Business Dynamism and Productivity: Shocks vs. Responsiveness By Ryan A. Decker; John C. Haltiwanger; Ron S. Jarmin; Javier Miranda
  8. Analyzing the Efficiency of County Road Provision - Evidence from Eastern German Counties By Carolin Fritzsche
  9. Changing demand for general skills, technological uncertainty, and economic growth By Masashi Tanaka
  10. Is Productivity on Vacation? The Impact of the Digital Economy on the Value of Leisure By Benjamin Bridgman
  11. Fostering productivity in the rural and agricultural sector for inclusive growth and sustainable development in Asia and the Pacific Abstract: By Upali Wickramasinghe
  12. China's productivity: past success and future challenges By Yanqun Zhang
  13. Dutch disease dynamics reconsidered By Hilde C. Bjørnland; Leif Anders Thorsrud; Ragnar Torvik
  14. Duality in Production By Diewert, Erwin
  15. Examining business performance of micro, small and medium scale enterprise through accounting records keeping; case study in Ghana By Tweneboah Senzu, Emmanuel; Ndebugri, Haruna
  16. Obstacles to productivity in Asia and Pacific region: finance reigns By Filipe Lage de Sousa
  17. Firms Dynamics and Business Cycle: New Disaggregated Data By Lorenza Rossi; Emilio Zanetti Chini
  18. Spatial competition and quality: evidence from the English family doctor market By Hugh Gravelle; Dan Liu; Carol Propper; Rita Santos
  19. Evaluating the Stability of School Performance Estimates for School Choice: Evidence for Italian Primary Schools By Tommaso Agasisti; Veronica Minaya
  20. Drivers of energy efficiency in German manufacturing: A firm-level stochastic frontier analysis By Lutz, Benjamin Johannes; Massier, Philipp; Sommerfeld, Katrin; Löschel, Andreas
  21. Choosing the Production Function Model for an Optimal Measurement of the Restructuring Efficiency of the Polish Metallurgical Sector in Years 2000–2015. By Gajdzik, Bożena; Gawlik, Remigiusz

  1. By: Friese, Maria; Heimeshoff, Ulrich; Klein, Gordon
    Abstract: This paper provides evidence that ownership and organization matters for the efficiency of provision of public services. In particular, we find that pure private ownership is more efficient than pure public ownership, and public ownership is more efficient than mixed ownership. The delegation of management in different legal forms also has an impact, highlighting the importance of the design of the government-operator relationship. We apply a structural approach of production function estimation ensuring precise determination of total factor productivity for a panel of German refuse collection firms between 2000-2012. We project total factor productivity estimates on ownership and organization. Our results are in line with the trade-offs implied by the property rights literature and provide important policy implications regarding the organization of public service provision.
    Keywords: productive efficiency,refuse collection,public service
    JEL: D2 H1 L3
    Date: 2018
  2. By: Diego Restuccia
    Abstract: Productivity is at the core of the large differences in per-capita income across countries. What accounts for international productivity differences? I discuss the possible cross-country differences in the allocation of inputs across heterogeneous production units---misallocation---as a factor in accounting for aggregate productivity. The policies and institutions generating misallocation are prevalent in poor and developing countries, and may also be responsible for differences in the selection and technology use of operating producers, contributing substantially to per-capita income differences across countries.
    Keywords: productivity, misallocation, selection, technology, regulation, trade, financial frictions, agriculture.
    JEL: O11 O14 O4
    Date: 2018–02–08
  3. By: Bettina Peters; Rebecca Riley; Iulia Siedschlag; Priit Vahter; John McQuinn
    Abstract: This paper examines the links between internationalisation, innovation and productivity in service enterprises. For this purpose, we use micro data from the Community Innovation Survey 2008 in Germany, Ireland and the United Kingdom, and estimate an augmented structural model. Our empirical evidence highlights the importance of internationalisation in the context of innovation outputs in all three countries. Our results indicate that innovation in service enterprises is linked to higher productivity. In all three countries analysed, among the innovation types that we consider, the strongest link between innovation and productivity was found with marketing innovations.
    Keywords: internationalisation of services; innovation; productivity
    JEL: L25 O31
    Date: 2018
  4. By: Akogun,Oladele B; Dillon,Andrew S.; Friedman,Jed; Prasann,Ashesh; Serneels,Pieter Maria
    Abstract: This paper investigates an alternative proxy for individual worker productivity in physical work settings: a direct measure of physical activity using an accelerometer. First, the paper compares worker labor outcomes, such as labor supply and daily productivity obtained from firm personnel data, with physical activity; they are strongly related. Second, the paper investigates the effect of a health intervention on physical activity, using a temporally randomized offer of malaria testing and treatment. Workers who are offered this program reallocate time from lower intensity activities in favor of higher intensity activities when they work.
    Keywords: Inequality,Social Protections&Assistance
    Date: 2017–10–30
  5. By: Eva Lyubich; Joseph S. Shapiro; Reed Walker
    Abstract: This paper provides the first estimates of within-industry heterogeneity in energy and CO2 productivity for the entire U.S. manufacturing sector. We measure energy and CO2 productivity as output per dollar energy input or per ton CO2 emitted. Three findings emerge. First, within narrowly defined industries, heterogeneity in energy and CO2 productivity across plants is enormous. Second, heterogeneity in energy and CO2 productivity exceeds heterogeneity in most other productivity measures, like labor or total factor productivity. Third, heterogeneity in energy and CO2 productivity has important implications for environmental policies targeting industries rather than plants, including technology standards and carbon border adjustments.
    JEL: F18 H23 Q56
    Date: 2018–01
  6. By: João Marinho (Strategy and Research Office, Ministry of the Economy. Nova School of Business and Economics, Universidade Nova de Lisboa); Pedro Carvalho (Strategy and Research Office, Ministry of the Economy. Nova School of Business and Economics, Universidade Nova de Lisboa)
    Abstract: The main goal of this paper is to find the fundamental determinants of competitiveness within the Portuguese Metalworking industry, which is measured by both the Export Status and the Export Intensity of a firm. This sector is absolutely vital to the Portuguese Economy and it is characterized by its highly exportable profile. Moreover, its heterogeneity makes the sector sole in its analysis and asks for a more thoughtful and contemplative enquiry. Therefore, exploiting a two-step approach using a Probit and a Fixed-Effect estimator, for Portuguese firm-level data from 2010 to 2015, we try to answer two research questions: which characteristics are associated with exporter firms? And then, within the group of firms that export, which are the characteristics related to higher levels of export Intensity? Interesting results were then yield showing that factors such as investment in fixed tangible and intangible assets, productivity (Total Factor Productivity), having previously exported and, one of our most relevant findings, capital intensity are associated with an increase of internationalization and thus of competitiveness.
    Keywords: Metalworking, Exports, Competitiveness, Firm-level data
    JEL: D22
    Date: 2018–02
  7. By: Ryan A. Decker; John C. Haltiwanger; Ron S. Jarmin; Javier Miranda
    Abstract: The pace of job reallocation has declined in all U.S. sectors since 2000. In standard models, aggregate job reallocation depends on (a) the dispersion of idiosyncratic productivity shocks faced by businesses and (b) the marginal responsiveness of businesses to those shocks. Using several novel empirical facts from business microdata, we infer that the pervasive post-2000 decline in reallocation reflects weaker responsiveness in a manner consistent with rising adjustment frictions and not lower dispersion of shocks. The within-industry dispersion of TFP and output per worker has risen, while the marginal responsiveness of employment growth to business-level productivity has weakened. The responsiveness in the post-2000 period for young firms in the high-tech sector is only about half (in manufacturing) to two thirds (economy wide) of the peak in the 1990s. Counterfactuals show that weakening productivity responsiveness since 2000 accounts for a significant drag on aggregate productivity.
    JEL: D24 E24 J23 L26
    Date: 2018–01
  8. By: Carolin Fritzsche
    Abstract: This study analyzes the efficiency of the road provision of the local governments of eastern German counties using data envelopment analysis. The provision of roads is a costly public service, which makes an efficiency analysis in this field an interesting subject. I enhance the previous literature by first, examining the differences in the efficiency of eastern German counties; I consider the age of the foundations of roads, which previous studies have not considered due to data limitations. Second, I use a unique dataset on road quality for my efficiency analysis and show that efficiency levels differ from studies that apply proxies, such as the number of accidents, to analyze the quality of roads. These findings indicate there is a great need to develop suitable proxy variables to describe government services. Additional, I show that the correlations between efficiency levels and county characteristics vary greatly depending on the quality indicator used.
    Keywords: DEA, technical efficiency, public services, roads.
    JEL: H41 H72 R51
    Date: 2018
  9. By: Masashi Tanaka (Graduate School of Economics, Osaka University)
    Abstract: We develop a simple endogenous growth model featuring individuals f choices between general and firm-specific skills, endogenous technological innovation, and a government subsidy for education. General skills are less productive than are specific skills, but they enable workers to operate all technologies in the economy. We show that demand for general skills increases as countries catch up to the world technology frontier. Further, using aggregated data for 12 European OECD counties, we calibrate the model and compare the theoretical prediction with the data. In cross-country comparisons, we find that the returns on general skills and the impact of general education expenditure on GDP are higher in countries with higher total factor productivity. These findings support our theoretical argument of the positive relationship between firms f demand for general skills and countries f stages of development.
    Keywords: General and specific skills, Technological uncertainty, Education policy, Distance to world technology frontier
    JEL: J24 O33 O40 I22
    Date: 2018–01
  10. By: Benjamin Bridgman (Bureau of Economic Analysis)
    Date: 2018–02
  11. By: Upali Wickramasinghe (Senior International Consultant, FAO-Regional Office for Asia and the Pacific)
  12. By: Yanqun Zhang (Institute of Quantitative and Technical Economics, Chinese Academy of Social Sciences)
  13. By: Hilde C. Bjørnland (BI Norwegian Business School and Norges Bank (Central Bank of Norway)); Leif Anders Thorsrud (Norges Bank (Central Bank of Norway) and BI Norwegian Business School); Ragnar Torvik (Norwegian University of Science and Technology and BI Norwegian Business School)
    Abstract: In this paper we develop the first model to incorporate the dynamic productivity consequences of both the spending effect and the resource movement effect of oil abundance. We show that doing so dramatically alters the conclusions drawn from earlier models of learning by doing (LBD) and the Dutch disease. In particular, the resource movement effect suggests that the growth effects of natural resources are likely to be positive, turning previous growth results in the literature relying on the spending effect on their head. We motivate the relevance of our approach by the example of a major oil producer, Norway, where it seems clear that the predictions based on existing theory do not apply. Although the effects of an increase in the price of oil may resemble results found in the earlier Dutch disease literature, the effects of increased oil activity do not. Therefore, models that only focus on windfall gains due to increased spending potential from higher oil prices, would conclude - incorrectly based on our analysis - that the resource sector cannot be an engine of growth.
    Keywords: Dutch disease, resource movements, learning by doing, oil prices, time-varying, VAR modelClassification-JEL: C32, E32, F41, Q33
    Date: 2018–02–07
  14. By: Diewert, Erwin
    Abstract: The paper reviews the application of duality theory in production theory. Duality theory turns out to be a useful tool for two reasons: (i) it leads to relatively easy characterizations of the properties of systems of producer derived demand functions for inputs and producer supply functions for outputs and (ii) it facilitates the generation of flexible functional forms for producer demand and supply functions that can be estimated using econometrics. The paper focuses on describing the properties of five functional forms that have been used in the production literature: (i) the Constant Elasticity of Substitution (CES), (ii) the Generalized Leontief, (iii) the translog, (iv) the Normalized Quadratic and (v) the Konüs Byushgens Fisher functional forms. The applications of GDP functions and joint cost functions to various areas of applied economics is explained.
    Keywords: Production theory, duality theory, cost functions, production functions, joint cost functions, national product functions, GDP functions
    JEL: C02 C32 C43 D24 D42 D92
    Date: 2018–02–06
  15. By: Tweneboah Senzu, Emmanuel; Ndebugri, Haruna
    Abstract: The research study, seek to critically examine and empirically justify the exact role and benefit, financial records keeping does to the performance of start-ups and management of micro, small and medium scale enterprises in Ghana.
    Keywords: MSMEs efficient management, MSMEs Accounting records keeping, Microeconomics, Macroeconomics, SMEs
    JEL: D2 M13 M41
    Date: 2018–01–19
  16. By: Filipe Lage de Sousa (Fluminense Federal University - Brazil)
    Abstract: Firms face difference obstacles for their development. This paper investigates which obstacle is the largest to firms’ productivity using micro-level data for the Asia and Pacific region. Access to finance shows the most robust result in our investigation, being stronger for SMEs. Removing SMEs’ credit constraints seem to be a powerful tool to promote economic growth in the region, particularly in the manufacturing sector.
  17. By: Lorenza Rossi (Department of Economics and Management, University of Pavia); Emilio Zanetti Chini (Department of Economics and Management, University of Pavia)
    Abstract: We provide stylized facts on firms dynamics by disaggregating U.S. yearly data from 1977 to 2013. To this aim, we use an unobserved component-based method, encompassing several classical regression-based techniques currently in use. Our series of entry and exit of firms at establishment level are feasible proxies of business cycle. Exit is a leading and countercyclical indicator, while entry is lagging and pro-cyclical. According to a standard structural econometric analysis, exit overshoots its average level in the medium-run. Several robustness checks confirm these results, hence supporting the most recent theoretical literature.
    Keywords: Bayesian VAR, Entry, Exit, Productivity, State Space Models.
    JEL: C13 C32 C40 E30 E32
    Date: 2018–02
  18. By: Hugh Gravelle (Centre for Health Economics, University of York, York, UK); Dan Liu (Centre for Health Economics, University of York, York, UK); Carol Propper (Imperial College London, UK); Rita Santos (Centre for Health Economics, University of York, York, UK)
    Abstract: We examine whether family doctor firms in England respond to local competition by increasing their quality. We measure quality in terms of clinical performance and patient-reported satisfaction to capture its multi-dimensional nature. We use a panel covering 8 years for over 8000 English general practices, allowing us to control for unobserved local area effects. We measure competition by the number of rival doctors within a small distance. We find that increases in local competition are associated with increases in clinical quality and patient satisfaction, particularly for firms with lower quality. However, the magnitude of the effect is small.
    Keywords: Quality, healthcare, choice, competition, family physicians
    JEL: I11 I18
    Date: 2018–02
  19. By: Tommaso Agasisti (Politecnico di Milano School of Management); Veronica Minaya (Politecnico di Milano School of Management)
    Abstract: School performance estimates have been used worldwide for both high-and low-stakes accountability purposes. It is expected that by evaluating school performance and making these results public, parents will use them to choose schools and schools will be motivated to increase performance. An institutional debate of this kind is likely to start in the near future in Italy, given the growing availability of indicators obtained through standardized test scores in reading and mathematics. Using administrative data provided by INVALSI (National Evaluation Committee for Education), this paper explores the stability of performance estimates for Italian primary schools. We first construct school performance metrics using INVALSI standardized tests and quarterly teacher assessments, by taking advantage of a rich array of individual level variables (including prior achievement) that allow us to estimate a school-effect in a ‘value added’ perspective. We then explore how sensitive school ratings are to the choice of performance metric and the use of different models to account for compositional differences due to students’ socioeconomic background. We also assess both cross-sectional differences in performance across schools and the persistence of these differences across cohorts. We find that school performance estimates are very robust whatever the models employed to control for compositional differences, but they are inconsistent across metrics and cohorts. We conclude that before using this kind of school-effects’ estimates for school choice purposes, more data and research is needed to understand the factors that drives the impact of a specific school on students’ results.
    Keywords: accountability, school choice, school value-added
    JEL: I21
    Date: 2018–02
  20. By: Lutz, Benjamin Johannes; Massier, Philipp; Sommerfeld, Katrin; Löschel, Andreas
    Abstract: Increasing energy efficiency is one of the main goals in current German energy and climate policies. We study the determinants of energy efficiency in the German manufacturing sector based on official firm-level production census data. By means of a stochastic frontier analysis, we estimate the cost-minimizing energy demand function at the two-digit industry level using firm-level heterogeneity. Apart from the identification of the determinants of the energy demand function, we also analyze potential drivers of energy efficiency. Our results suggest that there is still potential to increase energy efficiency in most industries of the German manufacturing sector. Furthermore, we find that in most industries exporting and innovating firms as well as those investing in environmental protection measures are more energy efficient than their counterparts. In contrast, firms which are regulated by the European Union Emissions Trading System are mostly less energy efficient than non-regulated firms.
    Keywords: Stochastic Frontier Analysis,Stochastic Demand Frontier,Energy Efficiency,Climate Policy,Manufacturing
    JEL: D22 D24 L60 Q41
    Date: 2017
  21. By: Gajdzik, Bożena; Gawlik, Remigiusz
    Abstract: Between 2000 and 2015, the Polish metallurgical sector was subject to serious restructuring. Presented research aimed at providing a framework for possibly most accurate measurement of efficiency of this process. The study employed: (I) Quantitative research for elaboration of production function models: power regression Cobb-Douglas function with its developments; (II) Qualitative research: Analytic Hierarchy Process for assessment of relevance of efficiency evaluation criteria in reference to various production function models in metallurgy sector: (i) sectoral added value (net production); (ii) production sold; and, (iii) steel production volume. Criteria relevance has been assessed by scientists and practitioners with specialization in metallurgy. As a result the sectoral added value function has been chosen as the one that optimally reflects sector’s restructuring efficiency. This, in turn, constitutes a qualitative confirmation of previous research result, which has been verified with a quantitative method. Practical outcome is a more precise modelling of efficiency of restructuring processes in the metallurgical sector, both for scientific and business needs. The main research limitations originate from the sector itself—in order to make our tool more universal, further research should be led in parallel branches of industry.
    Keywords: production function; metallurgical sector; restructuring; multicriteria decision-making; Analytic Hierarchy Process
    JEL: C35 C52 L61 O32
    Date: 2018–01–24

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