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on Efficiency and Productivity |
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Issue of 2018‒09‒03
twenty papers chosen by |
| By: | Dakpo, K Hervé; Desjeux, Yann; Jeanneaux, Philippe; Latruffe , Laure |
| Abstract: | The objective of the article is to assess productivity change in French agriculture during 2002-2014, namely total factor productivity (TFP) change and its components technological change and technical efficiency change. For this, we use the economically-ideal Färe-Primont index which verifies the multiplicatively completeness property and is also transitive, allowing for multi-temporal/lateral comparisons. To compare the technology gap change between the six types of farming considered, we extend the Färe-Primont to the meta-frontier framework. Results indicate that during 2002-2014, all farms experienced a TFP progress. Pig and/or poultry farms had the lowest TFP increase, while beef farms had the highest (19.1%). The latter farms had the strongest increase in technical efficiency, while technological progress was the highest for mixed farms. The meta-frontier analysis shows that field crop farms’ technology is the most productive of all types of farming. |
| Keywords: | Agricultural and Food Policy, Farm Management |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ags:inrasl:263010&r=eff |
| By: | Kloss, Mathias; Petrick, Martin |
| Abstract: | This paper investigates the impact of labour force composition on productivity in EU arable farming. We test for heterogeneous effects of family and hired labour for a set of five EU member states. To this end, we estimate augmented production functions using FADN data for the years 2001–2008. The results reject the notion that hired labour is generally less productive than family workers. In fact, farms with a higher share of hired workers are more productive than pure family farms in countries traditionally characterised by family labour, namely France and West Germany. Here, an increase in reliance on hired labour or the shift of family labour to more productive tasks could raise productivity. This finding calls into question a main pillar of the received family farm theory. In about half the countries, there are no statistically different effects of both types of labour. For the United Kingdom, we find the classical case with family farms being more productive than those relying on hired labour. As a side result, we find little evidence of non-constant technical returns to scale. |
| Keywords: | Labor and Human Capital, Productivity Analysis |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iamodp:274820&r=eff |
| By: | Latruffe, Laure; Dakpo, K Hervé; Desjeux, Yann; Justinia Hanitravelo, Giffona |
| Abstract: | With a sample of farms in the European Union (EU) and Farm Accountancy Data Network (FADN) data completed by additional data, we illustrate how the effect of farm subsidies on technical efficiency changes when environmental (good or bad) outputs are incorporated in the calculation of technical efficiency. Results indicate that the effect of the Common Agricultural Policy (CAP) operational subsidies on farm technical efficiency changes when environmental outputs (in this study: greenhouse gas emissions, nitrogen balance and ecological focus areas) are taken into account in the efficiency calculation: some effects change significance, and more importantly, some effects change sign. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, Farm Management |
| Date: | 2017–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:inrasl:266259&r=eff |
| By: | Timo Boppart (IIES, Stockholm University); Hannes Malmberg (Stanford University); Per Krusell (Stockholm University) |
| Abstract: | Labor productivity differences across countries are larger in agriculture than in non-agriculture. This observation has lead the literature to look for agriculture-specific distortions/inefficiencies in poor countries. However, labor productivity is not equal to TFP, and, over time and across countries, input intensification is more rapid in agriculture than in other sectors. This paper examines to what extent intensification of land, intermediate input use, capital deepening, and skill upgrading can account for the observed pattern in labor productivities. We first turn to the aggregate U.S. time series and uncover quantitatively similar changes in capital deepening and labor productivity as suggested by the cross-country data. U.S. agricultural census data helps us to characterize and estimate an agricultural production function at the gross output level. We quantify the importance of factor intensification, and, finally, we put our theory in a dynamic general equilibrium framework that captures the structural transformation out of agriculture. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:294&r=eff |
| By: | Mensah, Emmanuel (UNU-MERIT); Owusu, Solomon (UNU-MERIT); Foster-McGregor, Neil (UNU-MERIT); Szirmai, Adam (UNU-MERIT) |
| Abstract: | This paper combines a standard decomposition of labour productivity with a decomposition of labour market turbulence to study the role of structural change and job reallocation in the economic growth performance of African countries over the past fifty years using an updated and expanded version of the Africa Sector Database (ASD) developed by the Groningen Growth and Development Centre (GGDC). The results show that productivity growth has been generally low since the 1960s with moderate contributions from structural change across the entire period. Although productivity growth from structural change is generally low, a regional comparison shows that structural change is more rapid in East Africa than in the other regions of sub-Saharan Africa (SSA). While structural change accounts for more than half of the labour productivity growth in East Africa, within-sector productivity growth accounts for more than half of the labour productivity growth in West Africa and Southern Africa. Structural change is characterised by a net reallocation of workers across different sectors. As such, we compute the labour market turbulence effect of structural change. The turbulence effect of structural change has been mostly felt in the Service Sector due to volatile demand and the high level of informality. The paper further makes the first attempt to estimate the effect of labour market flexibility on job reallocation in Africa. The results show that more rigid labour markets reduce job reallocation across sectors impeding structural change and productivity growth in Africa. |
| Keywords: | Labour Market Turbulence, Productivity Growth, Structural Change, Africa |
| JEL: | O11 O14 O41 O43 O57 J21 |
| Date: | 2018–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2018025&r=eff |
| By: | Sui-Jade Ho (Central Bank of Malaysia); Dimitrije Ruzic (University of Michigan) |
| Abstract: | Aggregate productivity suffers when workers and machines are not matched with their most productive uses. This paper builds a model that features industry-specific markups, industry-specific returns to scale, and establishment-specific distortions, and uses it to measure the extent of this misallocation in the economy. Applying the model to restricted U.S. census microdata on the manufacturing sector suggests that misallocation declined by 13% between 1982 and 2007. The jointly estimated markup and returns to scale parameters vary substantially across industries. Furthermore, while the average markup has been relatively constant, the average returns to scale declined over this period. The finding of declining misallocation starkly contrasts the 29% increase implied by the widely used Hsieh & Klenow (2009) model, which assumes that all establishments charge the same markup and have constant returns to scale. Accounting for the variation in markups and returns to scale leads to the divergence of misallocation estimates in this paper from those implied by the Hsieh-Klenow model. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:119&r=eff |
| By: | Bareille, François; Dupraz, Pierre |
| Abstract: | Biodiversity Productive Capacity in Mixed Farms of North-West of France: a Multi-output Primal System Abstract: Previous studies on the productive value of biodiversity emphasized that crop diversity increases crop yields. Here, we focus on the productivity of crop diversity and permanent grasslands for crops and milk. Using a GMM approach, we estimate detailed production functions using a sample of 3960 mixed farms from the FADN between 2002 and 2013. We highlight that permanent grasslands enhance crop production. We confirm that crop diversity increases crop and milk yields. Permanent grasslands and crop diversity are however substitute inputs. We also find that both of these biodiversity productive capacities influence variable input productivities. These results suggest the potential adaptations of farmers’ choices to environmental measures. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ags:inrasl:257261&r=eff |
| By: | Rada, Nicholas; Liefert, William; Liefert, Olga |
| Abstract: | Russia’s transition from a planned to a market economy during the 1990s resulted in a severe decline in agricultural gross output and the inputs used in production. By the late 1990s, the agricultural output decline had bottomed out and growth resumed. For some products, such as grain, the production rebound created surpluses for export, while for other products for which Russia was a net importer, such as meat, the output growth reduced imports. Although the output turnaround began in the late 1990s, input use fell until the mid-2000s as the sector continued to correct overexpansion during the Soviet period. Measures of Russian national and district-level total factor productivity (TFP) growth in agriculture from 1994 to 2013 reveal that recovery varied regionally across the country, though greater output specialization has been a general feature among districts. The most robust productivity growth occurred in the South, which has emerged as Russia’s most important agricultural district. The Central district also exhibited strong TFP growth in the later years of the study period, which supports a cautiously optimistic view of Russia’s future agricultural growth. |
| Keywords: | Agricultural and Food Policy, International Relations/Trade, Production Economics, Productivity Analysis |
| Date: | 2017–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:256716&r=eff |
| By: | Daniel Gurara; Dawit Tessema |
| Abstract: | Many developing economies are often hit by electricity crises either because of supply constraints or lacking in broader energy market reforms. This study uses manufacturing firm census data from Ethiopia to identify productivity losses attributable to power disruptions. Our estimates show that these disruptions, on average, result in productivity losses of about 4–10 percent. We found nonlinear productivity losses at different quantiles along the productivity distribution. Firms at higher quantiles faced higher losses compared to firms around the median. We observed patterns of systematic shutdowns as firms attempt to minimize losses. |
| Date: | 2018–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/159&r=eff |
| By: | Tleubayev, Alisher; Bobojonov, Ihtiyor; Götz, Linde; Hockmann, Heinrich; Glauben, Thomas |
| Abstract: | Agriculture plays an important role for Kazakhstan not only because of rural employment, but also because of the diversity it brings to its oil dependent economy. A considerable increase in grain exports was achieved during the recent years, however, there still is a large room for in-creasing productivity and efficiency to boost the agricultural potential of the country further. The government of Kazakhstan has introduced several policy packages in the past to boost productivity and efficiency, however, the impact of these reforms has not been yet analyzed quantitatively. Micro level data collected from 200 farms in northern Kazakhstan in 2015 is used in the analysis, in order to fill this research gap. A mixture of evidences is found in terms of policy effect on productivity and efficiency. The results of the analysis showed that direct subsidy access reduced the efficiency, while access to supply chain infrastructure had the opposite effect and increased the efficiency. Therefore, the study concludes that the government should divert its policy support from direct subsidy payments to the improvement of agricultural infrastructure. This will influence positively not only productivity and efficiency, but also Kazakhstan’s commitments towards international and regional trade agreements. |
| Keywords: | Agricultural and Food Policy, Agricultural Finance, Crop Production/Industries, Productivity Analysis |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iamodp:253397&r=eff |
| By: | Chaoran Chen (National University of Singapore); Diego Restuccia (University of Toronto); Raul Santaeulalia-Llopis (MOVE-UAB and Barcelona GSE) |
| Abstract: | We assess the role of land markets on factor misallocation in Ethiopia—where land is owned by the state—by exploiting policy-driven variation in land rentals across time and space arising from a recent land certification reform. Our main finding from detailed micro data is that land rentals significantly reduce misallocation and increase agricultural productivity. These effects are nonlinear across farms—impacting more those farms farther away from their efficient operational scale. The effect of land rentals on productivity is 70 percent larger when controlling for non-market rentals—those with a pre-harvest rental rate of zero. Land rentals significantly increase the adoption of new technologies, especially fertilizer use. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:105&r=eff |
| By: | Gonzales-Rocha, Erick; Mendez-Guerra, Carlos |
| Abstract: | Abstract Large productivity dispersion within narrowly defined sectors is widely documented. However, across studies, several statistics are used to assess dispersion and there is not enough discussion about differences among them. Using firm-level data for the textile and furniture sectors in Brazil over the 2003-2009 period, we estimated different TFP measures according to four methods: Ordinary Least Squares (OLS for short), the stochastic frontier model of Battese and Coelli (1988, 1992)(STCH for short), the control function approach of Levinsohn and Petrin (2003) (LP for short), and the corrected control function approach of Ackerberg et al. (2015) (ACF for short). Next, we calculated three dispersion statistics: Standard Deviation (SD); Coefficient of Variation (CV); and Interquartile Range (IQR). After confirming the existence of large productivity dispersion within the studied sectors, we analyzed if the dispersion is increasing or decreasing over time. For both sectors, SD and CV convey an increasing productivity dispersion message, but they do so at different rates (CV is seven times higher than SD). On the contrary, IQR suggests less productivity dispersion over time for textiles and mixed results for furnitures. Overall, in terms of characterizing the increasing productivity dispersion, the CV statistic combined with the ACF method define an upper bound while the IQR with LP method define a lower bound. Considering these results, the article underlines that there are non-trivial differences in the use of dispersion statistics. Thus, their use could not be interchangeable and should consider methodological issues, behavior in the tails of the firm productivity distribution, sample sizes and scenarios of divergence/convergence, among others. |
| Keywords: | total factor productivity, dispersion, manufacturing firms, Brazil |
| JEL: | D24 O47 O54 |
| Date: | 2018–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88478&r=eff |
| By: | Ge Gao; Ke Wang; Chi Zhang; Yi-Ming Wei |
| Abstract: | It is crucial that the implementation of environmental regulations have a positive synergistic effect on carbon productivity growth (i.e., environmentally adjusted productivity growth with the consideration of carbon emissions) for China to realize its sustainable development goals because the country is currently under tripartite pressures of economic growth, carbon emissions control, and environmental pollution reduction. This paper investigates the impact of changes in environmental regulation stringency on industrial-level carbon productivity growth in China. Through utilizing the information entropy method, a new index of environmental regulation stringency is established by taking into account the effects of both pollution reduction consequences and pollution reduction measures. In addition, based on the data envelopment analysis (DEA) method, a Malmquist carbon productivity index is proposed to estimate the industrial carbon productivity growth of 21 major industrial sectors in China¡¯s 30 provinces over 2004-2014. Finally, an econometric regression model is applied to test the synergistic effects of environmental regulations on carbon productivity in China's major industrial sectors. The results show that (i) a stringent environmental regulation is associated with an increase in overall industrial carbon productivity growth in China; (ii) there exist significant pass-through effects in China's major industrial sectors that technology can transmit effectively from leader to follower; (iii) there also exist obvious follow-up effects in China's major industrial sectors, i.e., the industrial sectors that have larger technological gaps with the leaders catch up faster than others; and (iv) the environmental regulations have different effects on industrial sectors with different polluting levels, i.e., there is a positive linear relationship between environmental regulation stringency and industrial-level carbon productivity growth in low-polluting industrial sectors, a parabolic nonlinear relationship between them in high-polluting industrial sectors, and an inverted U-shaped relationship between them in moderate-polluting industrial sectors. |
| Keywords: | China's industrial sector; environmental regulation; industrial heterogeneity; pollution intensity; total factor carbon productivity |
| JEL: | Q54 Q40 |
| Date: | 2018–08–18 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:118&r=eff |
| By: | valter di Giacinto (Bank of Italy); Giacinto Micucci (Bank of Italy); Alessandro Tosoni (Bank of Italy) |
| Abstract: | We analyse the geographic localization and the productivity of knowledge-intensive business services (KIBS) in Italy, using both census data and balance-sheet data at the firm level. We find that KIBS are generally agglomerated in urban areas where they attain significantly higher labour productivity levels. Urban productivity advantages are found to be strongly associated with the local availability of human capital and to standard proxies of Marshall-Arrow-Romer and Jacobs agglomeration economies. Forward demand linkages and some factors impacting on the thickness of the local labour market also appear to be relevant. On the whole, the set of explanatory factors considered could explain the entire urban productivity premium estimated for Italian KIBS firms. |
| Keywords: | knowledge-intensive business services (KIBS); urban areas; agglomeration economies. |
| JEL: | J24 L84 R30 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_443_18&r=eff |
| By: | Bill Martin; Centre for Business Research |
| Abstract: | In Version One of his new paper, Oulton merges supply-side and demand-side theoretical models as a means better to understand why, since the financial crisis that broke in 2007, the UK’s productivity growth has not only been negligible but also a very poor outlier judged by international experience. Drawing on Arthur Lewis’s famous model of development, Oulton concludes, "rapid rates of immigration in conjunction with low rates of growth of export demand in the aftermath of the Great Recession can explain the UK productivity puzzle". According to Oulton, the UK's relatively poor productivity performance is attributable to a combination of the export demand constraint and of the continued growth of labour supply, which led to capital shallowing - a reduction in the rate of growth of capital services per hour worked. Bill Martin concludes, alas, that Arthur Lewis does not hold the key. The dominant, proximate "explanation" of the UK's relatively poor performance is relatively weak Total Factor Productivity (TFP), not relatively weak capital intensity. Moreover, the UK was not relatively more exposed to export demand shocks but delivered relatively worse output growth outcomes. Oulton nevertheless articulates the profound idea that full-employment capacity has adjusted to weak effective demand arising from adverse global developments. If this deep insight is correct, TFP would be a "measure of our ignorance" of the mechanisms that drove productive capacity to align with low aggregate demand. |
| Keywords: | productivity, slowdown, immigration, capital, Lewis, TFP |
| JEL: | E24 O41 O47 J24 F43 F44 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp498&r=eff |
| By: | Issanchou, Alice; Daniel, Karine; Dupraz, Pierre; Ropars-Collet, Carole |
| Abstract: | There is a growing public concern for soils and the maintenance or enhancement of soil quality. Actually, soil resource plays a central role in issues regarding food security and climate change mitigation. Through their practices, farmers impact the physical, biological and chemical quality of their soils. However, in a strained economic environment, farmers face a trade-off between short term objectives of production and profitability, and a long term objective of soil resource conservation. In this article, we investigate the conditions under which farmers have a private interest to preserve the quality of their soil. We also characterize the optimal management strategies of soil quality dynamics. We use a simplified theoretical soil quality investment model, where farmers maximise their revenues under a soil quality dynamics constraint. In our production function, soil quality and productive inputs are cooperating production factors. In addition, productive inputs have a detrimental impact on soil quality dynamics. It appears that in some cases, farmers have a private and financial interest in preserving the quality of their soil at a certain level, since it is an endogenous production factor cooperating with productive inputs. However, situations can occur wherein the cooperative production benefits of soil quality and productive inputs are smaller than the marginal deterioration of soil quality due to productive inputs. In this case, one cannot draw conclusions about the existence of an equilibrium. |
| Keywords: | Environmental Economics and Policy, Farm Management |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ags:inrasl:273053&r=eff |
| 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 Finance, Productivity Analysis |
| Date: | 2018–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iamodp:271870&r=eff |
| By: | Maruyama, Eduardo; Torero, Maximo; Scollard, Phoebe; Elías, Maribel; Mulangu, Francis; Seck, Abdoulaye |
| Abstract: | PARI’s main goal is to contribute to sustainable agricultural growth and food security in Africa and India by supporting the scaling of proven innovations in the agri-food sector in collaboration with all relevant actors. PARI accompanies specified innovations with ex-ante impact research and identifies further innovation opportunities, including those expressed by end users of research in collaboration with the multi-stakeholder innovation platforms. Within PARI’s work, AGRODEP and IFPRI have the task of assisting in the development of a methodology and concept for strategic analysis and visioning by providing economic modelling tools to help understand where the best opportunities for innovation investments in value chains are. For this purpose, IFPRI has constructed agricultural typologies of micro-regions for 8 of the 12 African countries in PARI to identify micro-regional level opportunities, bottlenecks and investment gaps based on the concept of the production possibilities frontier applied to farm activities, drawing on highly detailed household-level survey and geospatial data on agroecological conditions, accessibility and poverty. The stochastic frontier approach allows the econometric exploration of the notion that, given the fixed local agroecological and economic conditions in a micro-region and the occurrence of random shocks that affect agricultural production (weather, prices, etc.), the investment, production decisions and technological innovations a farmer makes translate into higher or lower production and income. In such a context, inefficiency is defined as the loss incurred in by operating away from the frontier given the current prices and fixed factors faced by the household. By estimating where the frontier lies, and how far each producer is from it, the stochastic frontier approach helps to identify local potential and efficiency levels to construct the typology. With this estimation approach estimates are obtained that allow for the prediction and extrapolation of agricultural income potential and efficiency measures at the regional level, which can then be grouped and classified into types to construct the typology. The typology then allows the identification of types of regions with extremely different needs, bottlenecks and opportunities, which in turn will result in a different set of investment recommendations for development in each type of region, including decisions regarding investments in agricultural innovation. |
| Keywords: | Agricultural and Food Policy, Community/Rural/Urban Development, Production Economics, Resource /Energy Economics and Policy |
| Date: | 2018–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:270849&r=eff |
| By: | Tozer, Peter R; Siddique, Muhammad Imran |
| Abstract: | This study utilizes a production function based on costs of feed, health and reproduction, and other inputs to measure efficiency of milk solids production in New Zealand. A second function was also used to measure inefficiency and the sources of inefficiency. The results show that on average producers are reasonably “efficient” with a score of 84%, with reproduction and farming system being major influences on efficiency. Efficient producers have good control over all costs and a high percentage of cows calving early in the milking season. One component of a system that “inefficient” producers can examine is their reproduction program. |
| Keywords: | Agribusiness, Agricultural Finance, Farm Management, Production Economics |
| Date: | 2016–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar16:260808&r=eff |
| By: | Oulton, Nicholas; Sebastiá-Barriel, María |
| Abstract: | We examine the hypothesis that capacity can be permanently damaged by financial, particularly banking, crises. A model which allows a financial crisis to have both a short-run effect on the growth rate of labor productivity and a long-run effect on its level is estimated on 61 countries over 1954–2010. A banking crisis as defined by Reinhart and Rogoff reduces the long-run level of GDP per worker, and also that of capital per worker, by on average 1.1 percent, for each year that the crisis lasts; it also reduces the TFP level by 0.8%. The long run, negative effect on the level of GDP per capita, 1.8 percent, is substantially larger. So there is also a hit to employment. The effects on labor productivity, capital and TFP are larger in developing than in developed countries; the opposite is the case for employment. |
| Keywords: | banking crisis; financial; potential output; productivity; recession |
| JEL: | E23 E32 J24 |
| Date: | 2017–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:68541&r=eff |