nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2018‒05‒07
seventeen papers chosen by

  1. The Many Decompositions of Total Factor Productivity Change By Balk, B.M.; Zofío, J.L.
  2. Airport Efficiency in Pakistan - A Data Envelopment Analysis with Weight Restrictions By David Ennen; Irem Batool
  3. Stochastic Frontier Analysis: Foundations and Advances By Subal C. Kumbhakar; Christopher F. Parameter; Valentin Zelenyuk
  4. The effects of educational mismatch on inventor productivity. Evidence from Sweden, 2003-2010 By Igna, Ioana A.
  5. Managing Technical Efficiency of Public and Private Hospitals in Vietnam: Do Market-Oriented Policies Matter? By Hideaki Kitaki
  6. In this paper we provide the first analysis of whether rushed privatizations, usually carried out under fiscal duress, increase or decrease firms’ efficiency, scale of operation (size) and employment. Using a large panel of firm-level data from Poland over 1995-2015, we show that rushed privatization has negative efficiency, scale and employment effects relative to non-rush privatization. The negative effect of rushed privatization on the scale of operations and employment is even stronger than its negative effect on efficiency. Our results suggest that when policy makers resort to rushed privatization, they ought to weigh these negative effects against other expected effects (e.g. on fiscal revenue). By Jan Hagemejer; Jan Svejnar; Joanna Tyrowicz
  7. Identifying factor productivity from micro-data: The case of EU agriculture By Petrick, Martin; Kloss, Mathias
  8. Trust-based work time and the productivity effects of mobile information technologies in the workplace By Viete, Steffen; Erdsiek, Daniel
  9. IO in I-O: Size, Industrial Organization, and the Input-Output NetworkMake a Firm Structurally Important By Basile Grassi
  10. Productivity Gap between Tradable and Non-Tradable Industries and Duality in Higher Education. By Elise S. Brezis; Gilad Brand
  11. Dispersion in Dispersion: Measuring Establishment-Level Differences in Productivity By Cindy Cunningham; Lucia Foster; Cheryl Grim; John Haltiwanger; Sabrina Wulff Pabilonia; Jay Stewart; Zoltan Wolf
  12. Explaining Growth Differences across Firms: The Interplay between Innovation and Management Practices By Livio Romano
  13. Decomposition of changes in the consumption of macronutrients in Vietnam between 2004 and 2014 By Simioni, Michel; Thomas-Agnan, Christine; Trinh, Thi-Huong
  14. Competition, Productivity, and Survival of Grocery Stores in the Great Depression By Emek Basker; Chris Vickers; Nicolas L. Ziebarth
  15. Unraveling the economic performance of the CEEC countries. The role of exports and global value chains By Jan Hagemejer; Jakub Mućk
  16. Nonparametric Estimates of the Clean and Dirty Energy Substitutability By Malikov, Emir; Sun, Kai; Kumbhakar, Subal C.
  17. Performance measurement in Australian water utilities: Current state and future directions By Alexandr Akimov; Paul Simshauser

  1. By: Balk, B.M.; Zofío, J.L.
    Abstract: Total factor productivity change, here defined as output quantity change di- vided by input quantity change, is the combined result of (technical) efficiency change, technological change, a scale effect, and input and output mix ef- fects. Sometimes allocative efficiency change is supposed to also play a role. Given a certain functional form for the productivity index, the problem is how to decompose such an index into factors corresponding to these five or six components. A basic insight offered in the present paper is that mean- ingful decompositions of productivity indices can only be obtained for indices which are transitive in the main variables. Using a unified approach, we ob- tain decompositions for Malmquist, Moorsteen-Bjurek, price-weighted, and share-weighted productivity indices. A unique feature of this paper is that all the decompositions are applied to the same dataset of a real-life panel of decision-making units so that the extent of the differences between the various decompositions can be judged.
    Keywords: total factor productivity, index, decomposition, Malmquist, Moorsteen, Bjurek, Fisher, Törnqvist
    JEL: C43 D24 D61
    Date: 2018–04–04
  2. By: David Ennen (Institute of Transport Economics, Muenster); Irem Batool (COMSATS Institute, Sahiwal)
    Abstract: This paper investigates the airports in Pakistan for potential cost inefficiencies. We identify inefficiencies by benchmarking the productive performance of airports using Data Envelopment Analysis (DEA). To improve the ability of DEA to differentiate performance levels, we analyze airport functions individually, using separate DEA models. In addition, restrictions are imposed on the possible weights of inputs and outputs in the DEA procedure, in order to improve the differentiation of performance. The definition of these weight restrictions is based on additional information on feasible production trade-offs and relative input prices. To the best of our knowledge, this paper provides the first application of predefined weight restrictions in a DEA analysis of airport efficiency. The results suggest that there are cost inefficiencies at several airports, which are mainly caused by overstaffing and overinvestment in capacity. Furthermore, we find that the operational scale of most airports is inefficiently small, so that increases in traffic will result in declining unit costs.
    Keywords: Airport, Efficiency, Benchmarking, Data Envelopment Analysis, Pakistan
    JEL: L93
    Date: 2017–11
  3. By: Subal C. Kumbhakar; Christopher F. Parameter; Valentin Zelenyuk (CEPA - School of Economics, The University of Queensland)
    Abstract: Here we consider the problem of aggregation of efficiency and productivity indices. We will summarize some of the existing results and will derive new results for aggregation of Hicks-Moorsteen productivity indices.
    Keywords: Efficiency, Productivity, Panel Data, Endogeneity, Nonparametric, Determinants of Inefficiency, Quantile, Identification.
    JEL: C10 C13 C14 C50
    Date: 2018–04
  4. By: Igna, Ioana A. (Department of Economics, University of Perugia)
    Abstract: This paper investigates the influence on inventor productivity of the imperfect occupational match, measured as the number of years of education in excess and in deficit to the required level (educational mismatch). The empirical model draws on a unique database that matches information about individual inventor characteristics, such as age, experience and gender, with patenting performance in Sweden over the period 2003-2010. The results suggest that over-educated (OE) inventors file a number of patents higher than inventors who are appropriately matched (RE), but perform poorly than well-matched inventors who hold a similar level of education. Conversely, under-educated (UE) inventors file a total number of patents lower than inventors who are well-matched (RE), but more than well-matched ones who hold the same level of education. These results conform to the hierarchical pattern of ORU model, well-documented in the literature relating the employees’ wages to educational mismatch (i.e. RE>OE>UE). We find that significant differences in returns to education across match and mismatch categories remain even after controlling for individual ability. Our findings are robust to controlling for differences between younger and older inventors, geographical areas and industry of work.
    Keywords: Inventor; Productivity; Educational mismatch; Patent
    JEL: J24
    Date: 2018–04–27
  5. By: Hideaki Kitaki
    Abstract: This study examined how ownership and the degree of competition in the market were related to pure technical efficiency, using micro-level hospital data from six regions in Vietnam that were collected by an original survey. According to the results, the provincial hospitals have significantly higher efficiency than the district hospitals, while the private hospitals have significantly lower efficiency than the district hospitals. Moreover, the number of competing hospitals has a statistically significant negative correlation with the efficiency of the hospitals, and so does the number of competing private hospitals. On the other hand, the degree of concentration in the market has no significant correlation with efficiency. Those results may imply that competition raises problems with resource allocation among the hospitals in Vietnam.
    Keywords: technical efficiency, ownership, competition, DEA, bootstrap method
    Date: 2018–03
  6. By: Jan Hagemejer (Narodowy Bank Polski; University of Warsaw; Group for Research in Applied Economics (GRAPE)); Jan Svejnar (Columbia University; Center for Economic Research and Graduate Education and Economics Institute (CERGE-EI); Institute of Labor Economics (IZA); Center for Economic and Policy Research (CEPR)); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw; Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union (IAAEU); Institute of Labor Economics (IZA))
    Keywords: privatization, rushed privatization, efficiency, firm size, employment, performance
    JEL: P45 P52 C14 O16
    Date: 2018
  7. By: Petrick, Martin; Kloss, Mathias
    Abstract: We examine the plausibility of four established and innovative identification strategies for agricultural production functions using farm-level panel datasets from five EU countries. Newly suggested proxy and dynamic panel approaches provide attractive conceptual improvements over received Within and duality models. Even so, empirical implementation of such advancements does not always live up to expectations. This is particularly true for the dynamic panel estimator, which mostly failed to identify reasonable elasticities for the (quasi-) fixed factors. Less demanding proxy approaches represent an interesting alternative for agricultural applications. In our EU sample, high production elasticities for materials prevail. Hence, improving the availability of working capital is the most promising way to increase agricultural productivity.
    Keywords: agricultural factor productivity,production function estimation,EU,Farm Accountancy Data Network,Landwirtschaftliche Faktorproduktivität,Schätzung von Produktionsfunktionen,Testbetriebsnetz
    JEL: C13 C23 D24 Q12
    Date: 2018
  8. By: Viete, Steffen; Erdsiek, Daniel
    Abstract: We investigate whether the returns to mobile information and communication technology (ICT) in the workplace are contingent on granting employees autonomy over the structure of their workday through trust-based work time arrangements (TBW). Our regression analysis is based on a production function framework and exploits fine-grained firm survey data on ICT use and organisational practices for 1,045 service firms in Germany. We find empirical support for the argument that the returns to mobile ICT are higher when TBW allows for discretion over when, where and how to perform work-related tasks. The finding holds when we account for more limited forms of workplace flexibility, suggesting that the high degree of formal employee autonomy under TBW drives the complementarity between mobile ICT and organisational practices.
    Keywords: mobile information and communication technologies,ICT,trust-based work time,work organisation,complementarity,productivity,firm performance
    JEL: D22 L22 M10 O33
    Date: 2018
  9. By: Basile Grassi
    Abstract: Firm-level productivity shocks can help understand sector- and macroeconomic-level outcomes. Capturing the market power of these firms is important: it determines how productivity gains translate into prices and markups. In existing models, firms do not internalize the impact of their systemic size. This paper explores the alternative oligopolistic market structure. To this end, I build a tractablemulti-sector heterogeneous-firmgeneral equilibriummodel featuring oligopolistic competition and an input-output (I-O) network. By affecting price and markup, firm-level productivity shocks propagate both to the downstream and upstream sectors. Sector-level competition intensity affects the strength of these new propagation mechanisms. The structural importance of a firm is determined by the interaction of (i) the sector-level competition intensity, (ii) the firm’s sector position in the I-O network, and (iii) the firm size. In a calibration exercise, the aggregate volatility arising from independent firm-level shock is 34% of the one observed in the data. Keywords: Input-Output Network, Production Network, Shocks Propagation, Oligopoly, Imperfect Competition, IndustrialOrganization, FirmHeterogeneity,RandomGrowth,Granularity, Volatility, Micro-Origin of Aggregate Fluctuations, Business Cycle
    Date: 2018
  10. By: Elise S. Brezis (Bar-Ilan University); Gilad Brand
    Abstract: Over the last decades, productivity in the tradable sector rose substantially, while in the non-tradable sector, output per worker has remained the same, despite a similar increase in human capital in both sectors. This paper emphasizes that duality in higher education as well as heterogeneous ability of individuals can explain the differences in labor productivity between tradable and non-tradable industries. The duality in the higher-education sector enables a separation of individuals by their ability, and in consequence, human capital in both industries is different. The heterogeneity in human capital can explain that despite an increase in human capital in both sectors, there is still a gap in productivity. In other words, the productivity gap between tradable and non-tradable sectors is fueled by the duality in higher education, leading to heterogeneity in human capital. In consequence, there is a contrast between on one hand, more mobility across countries, and on the other hand, less mobility between sectors.
    Keywords: ability, skills, productivity, tradable goods, services, duality, higher education, human capital, wage premium.
    JEL: F12 F16 J24 O14
    Date: 2017–10
  11. By: Cindy Cunningham; Lucia Foster; Cheryl Grim; John Haltiwanger; Sabrina Wulff Pabilonia; Jay Stewart; Zoltan Wolf
    Abstract: Productivity measures are critical for understanding economic performance. The official Bureau of Labor Statistics (BLS) productivity statistics, which are available for major sectors and detailed industries, are useful for understanding the sources of aggregate productivity growth. A large volume of research shows that within-industry variation in productivity provides important insights into productivity dynamics. This research has revealed large and persistent productivity differences across businesses even within narrowly-defined industries. These differences vary across industries and over time and are related to productivity-enhancing reallocation. Dispersion in productivity across businesses may provide information about the nature of competition and frictions within sectors and about the sources of rising wage inequality across businesses. There are currently no official statistics that provide this level of detail. To fill this gap in the official statistics, the BLS and the Census Bureau are collaborating to create measures of within-industry productivity dispersion with the goal of publishing dispersion statistics to complement the official aggregate and industry-level productivity growth statistics produced by the BLS and thereby improve our understanding of the rich productivity dynamics in the U.S. economy. We are also developing restricted-use datasets for use by researchers in the Federal Statistical Research Data Center (FSRDC) network.
    Date: 2018–04
  12. By: Livio Romano (Centro Studi Confindustria, Italy)
    Abstract: This paper provides first empirical evidence of the joint effects that innovation strategies and human resource management practices exert on firm growth. By exploiting unique information from a large sample of Italian manufacturing companies in the very recent years, it shows that investing in technology and implementing performance-based pay policies are both positively associated with a significant turnover, employment and labor productivity growth premium. However, their joint adoption does not necessarily sum the two effects. In particular, performance-based rewards boost growth of non-innovators and of firms pursuing relatively simple innovation strategies, centered around the acquisition of embodied technology. For firms strongly relying on R&D as an additional lever for product and process upgrading, the estimated effect of having in place monetary incentive mechanisms is null or even negative.
    Keywords: Heterogeneity, Innovation, Management Practices, Firm Growth
    Date: 2018–04
  13. By: Simioni, Michel; Thomas-Agnan, Christine; Trinh, Thi-Huong
    Abstract: Vietnam is undergoing a nutritional transition like many middle-income countries. This paper proposes to highlight the socio-demographic drivers of this transition over the period 2004-2014. We implement a method of decomposition of between-year differences in economic outcomes recently proposed in the literature. This method allows decomposing the composition effect on the distribution of the outcome under study, which is due to the differences in covariates across years, into direct contributions of each covariate and effects of their interactions. This method is applied to VHLSS data. The results show the importance of between-year changes in the distributions of covariates on between-year changes in the distributions of total calorie intake and calorie intakes from proteins and fat. This effect is more contrasted in case of calorie intake from carbohydrates. Food expenditure and household size appear to be the main drivers of the observed evolutions in macronutrients consumption. On the contrary, the urbanization of the population has a negative effect on these evolutions, except on fat consumption. The effect of urbanization is, nevertheless, less important than the positive effects of the previous two variables.
    Keywords: Macronutrient consumption; Nutritional transition; Decomposition method; Copulas; Vietnam
    JEL: C02 C14 C51 O15 Q18
    Date: 2018–04
  14. By: Emek Basker; Chris Vickers; Nicolas L. Ziebarth
    Abstract: We study the grocery industry in Washington, DC, during the Great Depression using data from the 1929 Census of Distribution, a 1929–1930 survey by the Federal Trade Commission, and a 1935 business directory. We ?rst document the di?erences between chains and independents in the Washington, DC, grocery market circa 1929 to better understand chains' competitive advantages. Second, we study correlates of survival from 1929 to 1935, a period of major contraction and upheaval. We find that more productive stores survived at higher rates, as did stores with greater assortment and lower prices. Presaging the supermarket revolution, combination stores were much more likely to survive to 1935 than other grocery formats.
    Keywords: Grocery Stores, Survival, Great Depression, Chains
    JEL: L81 L11 N82
    Date: 2018–04
  15. By: Jan Hagemejer (Narodowy Bank Polski and University of Warsaw); Jakub Mućk (Narodowy Bank Polski and Warsaw School of Economics)
    Abstract: In this study we assess the importance of exports and global value chains (GVC) participation for economic growth. Using novel methods and an extensive dataset, we decompose GDP growth in the Central and Eastern European (CEEC) countries to show that in a large part of the period of transition and integration with the EU, exports have played a predominant role in shaping economic growth. We also show that exports have been the major factor driving the convergence of the CEEC countries with their advanced counterparts. We employ panel methods to analyze the determinants of growth of exported value added and show that the major growth drivers in the analyzed period of 1995-2014 are GVC participation, imports of technology and capital deepening.
    Keywords: economic growth, international trade, GVC, heterogeneous panels, common correlated effects estimation, CEEC
    JEL: C23 F21 O33
    Date: 2018
  16. By: Malikov, Emir; Sun, Kai; Kumbhakar, Subal C.
    Abstract: In growth theory, a greater-than-one elasticity of substitution between clean and dirty energy is among key necessary conditions for long-run green economic growth. Using parametric specifications, Papageorgiou et al. (2017) provide first estimates of this fundamentally important inter-energy substitution elasticity. We extend their work by relaxing restrictive functional-form assumptions about production technologies using flexible nonparametric methods. We find that the technological substitutability between clean and dirty energy inputs may not be that strong, especially in the case of a final-goods sector for which the inter-energy elasticity of substitution statistically exceeds one for at most a third of industries/countries. Hence, the favorability of technological conditions for long-run green growth may not be corroborated by the cross-country empirical evidence as strongly as previously thought.
    Keywords: aggregate production function, clean and dirty energy, cross-country analysis, elasticity of substitution, environmental policy, green growth
    JEL: O44 O47 Q54 Q58
    Date: 2018
  17. By: Alexandr Akimov; Paul Simshauser
    Keywords: Benchmarking, water utilities, performance measurement, productivity
    JEL: G38 L25 L95
    Date: 2018–02

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