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on Efficiency and Productivity |
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Issue of 2018‒10‒08
24 papers chosen by |
| By: | Filippo di Mauro (National University of Singapore and CompNet); Bernardo Mottironi (London School of Economics); Gianmarco Ottaviano (Bocconi University); Alessandro Zona-Mattioli (European Central Bank) |
| Abstract: | Productivity growth has slowed in most Western countries, and the slowdown is likely to persist for some time. This paper investigates the impact of this phenomenon on export performance, with a particular focus on its heterogeneity across countries. To explain such heterogeneity, the authors pay particular attention to the role of productivity distribution and allocative efficiency. They rely on data from the Competitiveness Research Network (CompNet), a unique micro-aggregated database that provides a rich set of information on the variables’ distribution at the granular level, together with micro-founded indicators such as the level of allocative efficiency. They argue that increases in both productivity dispersion and allocative efficiency, measured with the methodology of G. Steven Olley and Ariel Pakes, are associated with higher export competitiveness for the set of countries in this analysis. They evaluate four separate scenarios according to different levels of productivity growth and different degrees of allocative efficiency and conclude that, while a reduction in productivity growth is always associated with a decrease in export competitiveness, for those countries placed in the top 10 percent of the distribution of the Olley and Pakes gap, this negative effect can be offset for as long as eight years. |
| Keywords: | Export competitiveness, Productivity distribution, Allocative efficiency, Productivity slowdown, OP gap |
| JEL: | F14 F17 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp18-10&r=eff |
| By: | Aiello, Francesco; Bonanno, Graziella; Capristo, Luigi |
| Abstract: | This paper reviews the literature on local government efficiency by meta-reviewing 360 observations retrieved from 54 papers published from 1993 to 2016. The meta-regression is based on a random effect model estimated with the 2-step Random Effects Maximum Likelihood (REML) technique proposed by Gallet and Doucouliagos (2014). Results indicate that the study design matters when estimating a frontier in local government. We find that studies focusing on technical efficiency provide higher efficiency scores than works evaluating cost efficiency. The same applies when using panel data instead of cross-section data. Interestingly, studies that use the Free Disposal Hull (FDH) approach yield, on average, higher efficiency scores than papers employing the Data Envelopment Analysis (DEA) method, thereby suggesting that in this literature the convexity hypothesis of the production set is a matter. Finally, the efficiency of local government increases with the level of development of the analysed countries and is positively related to the national integrity of the legal system. The opposite holds when considering the corruption. |
| Keywords: | municipalities; local government; meta-analysis; efficiency; frontier models; convexity; institution |
| JEL: | C20 C82 C83 D24 H7 H70 L88 |
| Date: | 2018–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88982&r=eff |
| By: | Laurens Cherchye; Thomas Demuynck; Bram De Rock; Marijn Verschelde |
| Abstract: | We propose a novel nonparametric method for the structural production analysis in the presence of unobserved heterogeneity in productivity. We assume cost minimization as the firms' behavioral objective, and we model productivity on which firms condition the input demand of the observed inputs. Our model can equivalently be represented in terms of endogenously chosen latent input costs that guarantee data consistency with our behavioral assumption, and we argue that this avoids a simultaneity bias in a natural way. Our Monte Carlo simulation and empirical application to Belgian manufacturing data show that our method allows for drawing strong and robust conclusions, despite its nonparametric orientation. For example, our results pinpoint a clear link between international exposure and productivity and show that primary inputs are substituted for materials rather than for productivity enhancement. |
| Keywords: | productivity, unobserved heterogeneity, simultaneity bias, nonparametric pro- duction analysis, cost minimisation, manufacturing |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/277180&r=eff |
| By: | Davide Antonioli (Università degli Studi "G. D'Annunzio" di Chieti-Pescara, Italy); Grazia Cecere (Télécom Ecole de Management, Institut Mines-Télécom, Paris, France); Massimiliano Mazzanti (Department of Economics and Management, University of Ferrara, Italy) |
| Abstract: | Information communication technology (ICT) and environmental innovation (EI) are relevant waves of the ongoing technological revolution. We study the complementarity in innovation adoption to test the research hypothesis that the higher the diffusion and intensity of usage of ICT and EI, the higher a firm’s productivity performance might be. However, it is not certain that the use of different innovations stemming from different innovation paths generates higher productivity. To test our hypothesis we use original survey data concerning manufacturing firms in Northeast Italy including detailed information on both ICT and EI. Empirical evidence shows that there are still wide margins to improve the integration between EI and ICT in order to exploit their potential benefits on productivity. The awareness of specific synergies seems to mainly characterize the heavy polluting firms that are subject to more stringent environmental constraints, while some trade-offs tend to emerge for the remaining firms. |
| Keywords: | ICT, environmental innovations, polluting sectors, complementarity, labour productivity |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:1118&r=eff |
| By: | Matej Kuc (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic) |
| Abstract: | This paper investigates the size–efficiency relation of European cooperative banks during the 2006-2015 period. We employ the Stochastic Frontier Analysis in order to obtain inefficiency estimates and its determinants on the set of 183 cooperative banks from 12 European countries. This work extends the existing literature by focusing on shape of size-efficiency relationship and examining also the post-crisis period after the fall of Lehman Brothers in 2008. Our results show that smaller European cooperative banks are significantly more cost efficient than their bigger peers and that the size-efficiency relation is linear. Interestingly, inefficiency remained roughly stable during the whole observation period without any substantial changes, not even on sub-samples of individual countries. These results imply that no significant consolidation of European cooperative banks can be expected in the near future. We conclude that for cooperatives, it is more efficient to remain small in size rather than to expand. From a policy perspective, we recommend regulators to reflect special nature of cooperative banks and allow them to operate at a small scale enabling their efficiency. As a result, we believe that one-size-fits-all regulation is harmful for efficient operations of cooperative banks in Europe. |
| Keywords: | cooperative banking, efficiency, EU, Stochastic Frontier Analysis |
| JEL: | D24 D61 E23 G21 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2018_21&r=eff |
| By: | John Van Reenen |
| Abstract: | A rich understanding of macro-economic outcomes requires taking into account the large (and increasing) differences between firms. These differences stem in large part from heterogeneous productivity rooted in managerial and technological capabilities that do not transfer easily between firms. In recent decades the differences between firms in terms of their relative sales, productivity and wages appear to have increased in the US and many other industrialized countries. Higher sales concentration and apparent increases in aggregate markups have led to the concern that product market power has risen substantially which is a potential explanation for the falling labor share of GDP, sluggish productivity growth and other indicators of declining business dynamism. I suggest that this conclusion is premature. Many of the patterns are consistent with a more nuanced view where many industries have become "winner take most/all" due to globalization and new technologies rather than a generalized weakening of competition due to relaxed anti-trust rules or rising regulation. |
| Keywords: | firm differences, concentration, market power, policy |
| JEL: | L2 M2 O14 O32 O33 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1576&r=eff |
| By: | K. L. Krishna (Centre for Development Economics, Delhi School of Economics, Delhi, India); Bishwanath Goldar (Former Professor, Institute of Economic Growth, Delhi, India); Suresh Chand Aggarwal (Former Professor, Department of Business Economics, University of Delhi, South Campus, Delhi, India); Deb Kusum Das (Ramjas College, University of Delhi, Delhi, India); Abdul A. Erumban (The Conference Board and University of Groningen); Pilu Chandra Das (Kidderpore College, University of Calcutta, Kolkata, India) |
| Abstract: | A comparative analysis of total factor productivity (TFP) growth in the formal and informal segments of Indian manufacturing industries is undertaken, along with an analysis of differences in the level of TFP between the two segments of these industries. The period covered for the analysis of TFP growth is 1980-81 (1980) to 2011-12 (2011), which is broken into three-sub-periods, 1980-1993, 1994-2002 and 2003-2011. The period covered for the analysis of TFP level differences is 2003-04 to 2011-12. From the analysis of TFP growth trends, it is found that the average growth rate in TFP in the informal manufacturing sector during 1980-2011 was significantly lower than that in the formal manufacturing sector (0.6% per annum as against 4.4% per annum, based on value added function framework). Both formal and informal manufacturing experienced a fall in the rate of TFP growth during 1994-2002 as compared to 1980-1993, and then achieved a marked acceleration in TFP growth during 2003-11. The acceleration in TFP growth in aggregate formal manufacturing in India in the period since 2003 is contributed mainly by improved TFP growth performance of Coke and refined petroleum products industry with additional contributions made by Food, beverages and tobacco products, Chemicals and chemical products, and Textiles and leather products. In the case of informal manufacturing, the acceleration in TFP growth after 2003 is mainly traceable to the improved TFP growth performance of Textiles and leather products industry with additional contributions made by Wood and wood products, Food, beverages and tobacco products, and Chemicals and chemical products. The comparison of the level of TFP between the formal and informal segments of Indian manufacturing industries for the period 2003-2011 brings out that it is substantially lower in informal manufacturing than formal manufacturing. |
| Keywords: | Total Factor Productivity, Indian Manufacturing, Formal and Informal Segments |
| JEL: | D24 L60 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cde:cdewps:291&r=eff |
| By: | Pokharel, Krishna P.; Featherstone, Allen M.; Archer, David W. |
| Abstract: | This study examined the impact of downside risk on cost efficiency (CE) and revenue efficiency (RE) for a sample of agricultural cooperatives. Downside risk is an appropriate measure of risk as it accounts for loss below the target return level regardless of individuals’ risk preference. The semi-variance of return on equity was used a measure of downside risk. CE and RE were estimated using data envelopment analysis (DEA) without adjusting for downside risk and then re-estimated adjusting for downside risk. The average CE and RE scores were higher with the inclusion of downside risk than the scores without downside risk. The DEA method without accounting for risk overestimates inefficiency and may misguide managers on adjustments needed to improve performance. |
| Keywords: | Agribusiness, Agricultural Finance |
| Date: | 2018–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea18:266729&r=eff |
| By: | Basurto Hernandez, Saul; Maddison, David; Banerjee, Anindya |
| Keywords: | Productivity Analysis and Emerging Technologies, Food and Agricultural Policy Analysis, Production Economics |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274376&r=eff |
| By: | Garcia-Fuentes, Pablo A.; Fukasawa, Fukasawa; Rodriguez Martinez, Edgar A.; Vargas, Conney; Mireles, Rodrigo |
| Abstract: | This research uses survey data to assess the effect of oxen as draft animals on agricultural productivity and farm agricultural income in Nicaragua. The results show that farms that use oxen to plow the land have higher productivity of beans than farms that use stick to plant crops. On average, using oxen increases farm’s beans output by 7.75 100-pound bags of beans, and hiring oxen increases farm’s beans output by 8.5 100-pound bags of beans. Farms that use oxen or hire oxen to plow the land have more planted area. The impact of using oxen to plow the land through farm planted area on farm agricultural gross income is 18.13 percent, and the impact of hiring oxen to plow the land through farm planted area on farm agricultural gross income is 25.55 percent. |
| Keywords: | Community/Rural/Urban Development, Food Security and Poverty, International Development |
| Date: | 2018–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea18:266599&r=eff |
| By: | Hueth, Brent M.; Hutchins, Jared; Hutchins, Jared |
| Keywords: | Productivity Analysis and Emerging Technologies, Ag Finance and Farm Management, Rural/Community Development |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274384&r=eff |
| By: | Miyaki, Miki; Okajima, Yuko |
| Abstract: | This study examines the research productivity of departments in seven former imperial universities of Japan. We categorize the departments into five academic fields: engineering, health sciences (i.e., medicine, dentistry and pharmaceutical), economics, science, and agriculture. Then, the impact of fundamental and external research funds is examined to see whether they positively affect research productivity—measured by the number of papers accepted in peer-reviewed, international academic journals. Additionally, we investigate whether such external funding sources affect productivity in each of the five fields differently, noting any variation between them. The estimation results reveal that, first, the increase of fundamental and external funds per faculty member is positively correlated with research productivity in the fields of engineering and health sciences. Second, considering the results of further investigation into the effects of external funding, research funding by the public sector can increase productivity in each of the five academic fields. Third, the results pertaining to private research funds show that research funding provided by firms can increase productivity in engineering and health sciences. However, for economics, the increase in external funding from firms is negatively correlated with research productivity. This result might be because the purpose of industry–university collaboration differs according to the academic field. Regarding economics, the output from the resulting collaboration might not result in the production of an academic paper, but rather make policy recommendations or provide consulting using quantitative analysis. This study is the first attempt by any Japanese university to analyze research productivity across several departments. The empirical results show that depending on the discipline, the same resources of research funding impact research productivity differently. Nowadays, the Japanese central government has been about the business of reforming resource allocation systems of universities by evaluating their research performance, basing them more on the quantitative indicators such as the key performance indicators (KPI). However, a key result of this study implies that when a relative evaluation of universities is applied, each university’s situation must be more carefully considered, especially in terms of what kinds of academic departments it has, and which specialties or segments it features. |
| Keywords: | financial sources, research productivity, departmental-level analysis, five academic fields |
| JEL: | I22 I23 I28 |
| Date: | 2018–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88931&r=eff |
| By: | Potter, Nicholas; Brady, Michael P.; Rajagopalan, Kirti |
| Keywords: | Production Economics, Research Methods/Econometrics/Stats, Natural Resource Economics |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274347&r=eff |
| By: | Abay, Kibrom A.; Abate, Gashaw; Barrett, Christopher B.; Bernard, Tanguy |
| Keywords: | International Development, Food and Agricultural Policy Analysis, Research Methods/Econometrics/Stats |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274248&r=eff |
| By: | Yao, Ling; Chen, Qihui; Wu, Laping |
| Keywords: | Production Economics, Food and Agricultural Policy Analysis, Productivity Analysis and Emerging Technologies |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274363&r=eff |
| By: | Chen, Chen-Ti; Lade, Gabriel; Crespi, John M.; Keiser, David A. |
| Keywords: | Resource and Environmental Policy Analysis, Research Methods/Econometrics/Stats, Production Economics |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274410&r=eff |
| By: | Mzyece, Agness; Zereyesus, Yacob A.; Shanoyan, Aleksan |
| Keywords: | Agribusiness Economics and Management, International Development, Production Economics |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:273794&r=eff |
| By: | Luo, Yufeng; Chen, Feifei; Qiu, Huanguang |
| Keywords: | Production Economics, Productivity Analysis and Emerging Technologies, Household and Labor Economics |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274364&r=eff |
| By: | Pokharel, Krishna; Lynes, Melissa; Featherstone, Allen M.; Archer, David W. |
| Keywords: | Agribusiness Economics and Management, Productivity Analysis and Emerging Technologies, Production Economics |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:273769&r=eff |
| By: | Oliver Rehbein; Santiago Carbo-Valverde |
| Abstract: | The decision to change or terminate a bank-firm relationship has been demonstrated to be crucial for firm performance following bank mergers. We find both competition and the available firm collateral to be important factors in enabling firms to switching banks, instead of dropping their bank relationships. We also provide novel evidence that firms who are able to \textit{add} a bank relationship following a merger exhibit much stronger post-merger performance. Our findings are consistent with the interpretation that bank-mergers cause a reduction in lending to most firms, leading them to search for alternative sources of finance. |
| Keywords: | bank mergers, relationship banking, competition |
| JEL: | G21 G34 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_044_2018&r=eff |
| By: | Hyejin Ku (University College London, Department of Economics and CReAM) |
| Abstract: | This paper studies a fair trade program in which consumers provide a wage subsidy (bonus) to piece-rate tomato pickers. The total subsidy—determined by sales to participating buyers—is divided among workers based on their relative output: a worker who produces more gets a larger share of the bonus. Although seemingly mimicking the existing piece-rate pay scheme, the mechanism associated with the bonus payment is really a relative performance evaluation, as the size of total bonus is exogenous and invariant to workers’ effort. Therefore, for a given sized subsidy, the combined total (or per worker average) utility gains would become the largest if the workers keep their efforts at the pre-program level. Empirical analysis shows that worker effort (and hence productivity) increases substantially in response to the program, suggesting that currently, workers’ combined gains per dollar of subsidy are not being maximized. Alternative distribution schemes are discussed. |
| Keywords: | piece rate, subsidy, fairness, tragedy of the commons, natural experiment |
| JEL: | J24 J31 J38 M52 O12 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1815&r=eff |
| By: | Nehring, Richard F.; Gillespie, Jeffrey M.; Harris, Michael; Erickson, Kenneth W. |
| Keywords: | Agribusiness Economics and Management, Production Economics, Resource and Environmental Policy Analysis |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:273793&r=eff |
| By: | Brown, Mark; Ferguson, Shon; Viju, Crina |
| Keywords: | Productivity Analysis and Emerging Technologies, International Trade, Food and Agricultural Policy Analysis |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274381&r=eff |
| By: | Queiroz, Pedro; Silva, Felipe; Fulginiti, Lilyan E. |
| Keywords: | Resource and Environmental Policy Analysis, Productivity Analysis and Emerging Technologies, Production Economics |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274437&r=eff |