nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2018‒03‒26
thirteen papers chosen by

  1. Firm-level Productivity Dispersion and Convergence By G. Cette; S. Corde; R. Lecat
  2. Poor productivity: an Italian perspective By Sara Calligaris; Massimo Del Gatto; Fadi Hassan; Gianmarco Ottaviano; Fabiano Schivardi
  3. Environmentally Adjusted Multifactor Productivity: Methodology and Empirical results for OECD and G20 countries By Miguel Cárdenas Rodríguez; Ivan Hascic; Martin Souchier
  4. Unveiling the Endogenous Relationship between Technical Efficiency and Value Creation in Mergers and Acquisitions in Nigeria By Mfon Akpan; Peter Wanke; Jorge Junio Moreira Antunes; Rangan Gupta
  5. What drives productivity change in the manufacturing sector? Evidence from the metalworking industry in Ethiopia By Girum Abebe; Tigabu Degu; Gebrehiwot Ageba
  6. Foreign Investment and Domestic Productivity in the Czech Republic: A Quantitative Survey By Havranek, Tomas; Hampl, Mojmir
  7. Firm performance and participation in public procurement: Evidence from Sub-Saharan Africa By Hoekman, Bernard; Sanfilippo, Marco
  8. South-South FDI: Is It Really Different? By Gold, Robert; Görg, Holger; Hanley, Aoife; Seric, Adnan
  9. Computerizing Industries and Routinizing Jobs: Explaining Trends in Aggregate Productivity By Aum, Sangmin; Lee, Sang Yoon (Tim); Shin, Yongseok
  10. Assessment of national waste generation in EU Member States’ efficiency By Halkos, George; Petrou, Kleoniki Natalia
  11. Electricity and manufacturing firm profits in Myanmar By Lisa CHAUVET; Alvaro DE MIGUEL TORRES; Alexa TIEMANN
  12. Measuring Efficiency of Fuel Oil Usage in PT PLN: A Short-Run Analysis By NABABAN, TONGAM SIHOL
  13. Structural Reforms and Firms’ Productivity: Evidence from Developing Countries By Wilfried A. KOUAMÉ; Sampawende J.-A. TAPSOBA

  1. By: G. Cette; S. Corde; R. Lecat
    Abstract: The productivity slowdown has been analysed as an effect of weaker technological progress, of the digital economy or of a less efficient reallocation process. Using data on firms operating in France, we highlight that, at the technological frontier, productivity has accelerated, especially over the recent period, which contradicts the hypothesis of a decline in innovation. The most productive firms in a given year do not, however, improve their relative advantage. The convergence of firms’ productivity does not seem to have slowed down in the 2000s, which does not confirm the hypothesis of a decrease in the dissemination of innovation. On the other hand, the dispersion of productivity between firms has increased, which suggests growing difficulties in reallocating production factors, labour and capital, between firms.
    Keywords: total factor productivity, dissemination of innovation.
    JEL: E22 L11 O47
    Date: 2018
  2. By: Sara Calligaris; Massimo Del Gatto; Fadi Hassan; Gianmarco Ottaviano; Fabiano Schivardi
    Abstract: Productivity growth has been slow in Western countries since the global financial crisis, but in Italy it has been stagnating for 25 years. Fadi Hassan and Gianmarco Ottaviano investigate inefficiency and misallocation in the Italian economy to draw broader lessons about what lies behind the 'productivity puzzle'.
    Keywords: misallocation, tfp, productivity puzzle, italy
    JEL: D22 D24 O11 O47
    Date: 2018–03
  3. By: Miguel Cárdenas Rodríguez (OECD); Ivan Hascic (OECD); Martin Souchier
    Abstract: This paper replaces the 2016 version which contained outdated information on natural capital for a few countries corresponding to an earlier version of the estimations. Figures 1-10, A4.1, A5.1, A5.2, A6.1 have therefore been adjusted, with the only noticeable change being the ranking in the contributions of natural capital to output growth. The main messages and conclusions remain unchanged. The paper further refines the OECD framework for measuring the environmentally adjusted multifactor productivity growth that seeks to incorporate environmental services in productivity analysis. Compared to standard productivity measurement, this framework allows accounting also for the use of natural capital (currently including 14 types of fossil fuels and minerals) and the emission of pollutants as negative by-products (currently including 8 types of greenhouse gases and air pollutants). An updated series of the indicator is presented, with a geographic coverage extended to all OECD and G20 countries for the 1990-2013 time period. The indicators presented here allow the sources of economic growth to be better identified, and growth prospects in the long run to be better assessed.
    Keywords: air pollution, emission shadow prices, exhaustible natural capital, green productivity, growth accounting, multifactor productivity, productivity measurement, total factor productivity
    JEL: D24 O44 O47 Q3 Q52 Q53 Q56
    Date: 2018–03–16
  4. By: Mfon Akpan (Faculty of Accountancy & Management, Universiti Tunku Abdul Rahman (UTAR), Sungai Long Campus, Malaysia); Peter Wanke (COPPEAD Graduate Business School; Federal University of Rio de Janeiro, Rio de Janeiro, Brazil); Jorge Junio Moreira Antunes (COPPEAD Graduate Business School; Federal University of Rio de Janeiro, Rio de Janeiro, Brazil); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa)
    Abstract: There is a growing literature on how the beneficial impacts of horizontal mergers and acquisitions (M&A) should be measured. Thus far, however, there have been few studies addressing endogeneity between technical efficiency and value creation: they tend to present a bidirectional and simultaneous relationship. This research contributes to the debate by investigating the impact of voluntary horizontal M&A on these metrics in Nigeria between 1995 and 2012, in light of the individual performance of bidders, targets, and the resulting corporate companies. First, technical efficiency, technology gap ratio, and returns-to-scale estimates were computed based on a meta-frontier DEA approach, together with a set of contextual variables that encompass performance indicators which reflect the value creation process. Then, robust regressions were used to discriminate these efficiency estimates in terms of such business-related variables, correcting for endogeneity and controlling for industry and trend effects. The results reveal that these contextual variables significantly impact virtual efficiency and returns-to-scale levels, and that there is a tradeoff between efficiency and value creation at some point in the merging process. Managerial implications are derived.
    Keywords: Mergers and acquisitions, Nigeria, technical efficiency, value-creation, endogeneity
    Date: 2018–03
  5. By: Girum Abebe (Ethiopian Development Research Institute); Tigabu Degu (Ethiopian Development Research Institute); Gebrehiwot Ageba (Ethiopian Development Research Institute)
    Abstract: We employ longitudinal data to explore sources of heterogeneity in productivity among firms in the metalworking industry in Ethiopia. We measure multifactor and labor productivity using non-parametric and regression residual parametric approaches. We find a sizable improvement in both labor productivity and TFP over time, which is also accompanied by large productivity dispersion across firms in the industry. The decomposition of industry-level productivity indicate that productivity increases is mostly explained by the reallocation of market shares across plants in the industry and that firm exit is preceded by declining productivity trends. Our reduced model also indicates that labor productivity and TFP is significantly higher in firms with a large share of workers with vocational training background. Productivity, however, does not differ with firm ownership. These results are robust to the choice of productivity measures.
    Keywords: metalworking, labor productivity, TFP, exit, entry, human capital
    JEL: O12 D24 J24
    Date: 2018–03
  6. By: Havranek, Tomas; Hampl, Mojmir
    Abstract: In this paper we take stock of the evidence concerning the effect of foreign direct investment (FDI) on the productivity of locally owned firms in the Czech Republic. To this end, we collect 332 estimates previously reported in journal articles, working papers, and PhD theses. We find that the mean reported externality arising for domestic firms due to the presence of foreign firms (the “FDI spillover”) is zero. There is no evidence of publication bias, i.e., no sign of selective reporting of results that are statistically significant and show an intuitive sign. Nevertheless, we find that the overall spillover effect is positive and large when more weight is placed on estimates that conform to best-practice methodology. Our results suggest that, as of 2018, a 10-percentage-point increase in foreign presence is likely to lift the productivity of domestic firms by 11%. The effect is even larger for joint ventures, reaching 19%.
    Keywords: Foreign direct investment,productivity,spillovers,meta-analysis
    JEL: F23
    Date: 2018
  7. By: Hoekman, Bernard; Sanfilippo, Marco
    Abstract: This paper exploits a firm-level dataset for nineteen Sub-Sharan African countries that provides information on the share of total sales to government entities to provide new insights into the relative importance of participation in public procurement activity for different types of firms. We investigate whether participation in public procurement is associated with realization of the types of goals that underlie industrial policy - an improvement in measures of firm performance - and find that firms that sell a larger share of their output to government entities have better productivity performance. This is most strongly the case for domestically-owned firms, especially small companies, firms engaged in manufacturing activities and those located in the capital city. A positive relationship between participation in public procurement and performance is not observed for foreign-owned firms or companies that are in the service sector.
    Keywords: Firm performance; productivity; government demand; public procurement; industrial policy; Sub-Saharan Africa
    JEL: H57 O12
    Date: 2018–02
  8. By: Gold, Robert; Görg, Holger; Hanley, Aoife; Seric, Adnan
    Abstract: We compare the performance of Northern and Southern multinationals in Sub-Saharan Africa, and contrast it with local firms in the host country. Employing unique firm level data for 19 Sub-Saharan African countries, we show that firms receiving FDI outperform domestic ones, while the origin of the foreign investor is of minor importance. We use four different definitions of "South" to compare Northern and Southern FDI. Overall, we do not find strong differences in terms of firm productivity growth between Northern and Southern FDI, irrespective of how the latter is defined. We also find that employment growth is generally higher for firms receiving FDI from other African investors as compared to Northern FDI, and they also receive more technology transfer from their parent company abroad.
    Keywords: South-South FDI,productivity,performance differences,Africa
    JEL: F23 O14
    Date: 2017
  9. By: Aum, Sangmin; Lee, Sang Yoon (Tim); Shin, Yongseok
    Abstract: Aggregate productivity growth in the U.S. has slowed down since the 2000s. We quantify the importance of differential productivity growth across occupations and across industries, and the rise of computers since the 1980s, for the productivity slowdown. Complementarity across occupations and industries in production shrinks the relative size of those with high productivity growth, reducing their contributions toward aggregate productivity growth, resulting in its slowdown. We find that such a force, especially the shrinkage of occupations with above-average productivity growth through ``routinization,'' was present since the 1980s. Through the end of the 1990s, this force was countervailed by the extraordinarily high productivity growth in the computer industry, of which output became an increasingly more important input in all industries (``computerization''). It was only when the computer industry's productivity growth slowed down in the 2000s that the negative effect of routinization on aggregate productivity became apparent. We also show that the decline in the labor income share can be attributed to computerization, which substitutes labor across all industries.
    Date: 2018–02
  10. By: Halkos, George; Petrou, Kleoniki Natalia
    Abstract: Waste generation and management may be considered as either a by-product of economic actions or even used as input to economic activity like energy recovery. Every country produces different amounts of municipal solid waste (MSW) and with different composition. This paper deals with the efficiency of 28 EU Member States for the years 2008, 2010 and 2012 by employing Data Envelopment Analysis (DEA) and by using eight parameters, namely waste generation, employment rate, capital formation, GDP, population density and for the first time SOx, NOx and GHG emissions for the relevant countries. With these parameters six environmental production frameworks have been designed each with different inputs and outputs. The empirical analysis shows that overall the more efficient countries according to all frameworks include Belgium, Germany, Austria, the Netherlands, Sweden and Norway. These results were then reviewed against the recycling rate of each country for the examined time periods. The recycling rate actually depicts the DEA results, namely more efficient countries seem to have a higher recycling rate too. Moreover the DEA efficiency results were contrasted to the overall treatment options used in the countries under consideration. Overall it is noticed that countries employing all four treatment options with high use of more sustainable ones and decrease in the use of landfill are the ones that also proved to be efficient according to DEA.
    Keywords: Environmental efficiency; waste generation; EU Member States; Data Envelopment Analysis; sustainability; environmental policy.
    JEL: C18 O13 O52 Q50 Q53 Q56 R11
    Date: 2018–02–03
  11. By: Lisa CHAUVET (IRD-DIAL); Alvaro DE MIGUEL TORRES (Paris School of Economics.); Alexa TIEMANN (OECD)
    Abstract: We examine the impact of being located in areas with higher availability of electricity on manufacturing firm profits in Myanmar. Using a survey of 497 manufacturing firms conducted in 2014 and covering the whole territory of Myanmar, we investigate whether firms belonging to industries that tend to make more intensive use of electricity show better performance if such firms are located in areas with higher availability of electricity. We find that electricity provided by the national power grid tends to have a positive impact on manufacturing firm profits. Results are robust to reducing the sample to firms that could not have chosen their location endogenously, as well as to the use of an instrumental variable.
    JEL: H4 O13 O14 L60
    Date: 2018–02
    Abstract: Abstract - This study aims to measure and to analyze the efficiency level of fuel oil usage in units of PT. PLN generation. The study result shows that until now the PLN is still operating in inefficiency condition, because of foil oil usage. The energy consumption level of fuel oil is less efficient compared with coal energy in generating electricity. Based on the short-term CobbDouglass analysis,the average decrease in oilfuel usage efficiency over the period 2011 – 2015 is 17.21% per year. Allegedly, even though the portion has decreaseddue to the unsustainable supply of non-fuel fuel, it is important to maintain the use of fuel oil.The government is asked to continue evaluate the use of fuel oil inputs, diversify input energy and increase efficiency in producing electricity in Indonesia.
    Keywords: efficiency, electrical energy, input, fuel oil, PT. PLN.
    JEL: D2 D24 J21 J24
    Date: 2018–02
  13. By: Wilfried A. KOUAMÉ (World Bank Group); Sampawende J.-A. TAPSOBA (International Monetary Fund (IMF))
    Abstract: This paper assesses the effects of structural reforms on firm-level productivity for 37 developing countries from 2006 to 2014 period. It takes advantage of the IMF Monitoring of Fund Arrangements dataset for reform indexes and the World Bank Enterprise Surveys for firm-level productivity. The paper highlights the following results. Structural reforms such as financial, fiscal, real sector, and trade reforms, significantly improve firm-level productivity. Interestingly, real sector reforms have the most sizeable effects on firm-level productivity. The relationship between structural reforms and firm-level productivity is nonlinear and shaped by some firms’ characteristics such as the financial access, the distortionary environment, and the size of firms. The pace of structural reforms matters since being a “strong reformer” is associated with a clear productivity dividend for firms. Finally, except for financial and trade reforms, all structural reforms under consideration are bilaterally complementary in improving firm-level productivity. These findings are robust to several sensitivity checks including alternatives methodology and measure of productivity, and a counterfactual experiment based on unsuccessful reforms.
    Keywords: Structural Reforms, Firm-level productivity, Developing countries
    JEL: D22 O16 O23 O24
    Date: 2018–03

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