nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2018‒11‒12
twelve papers chosen by

  1. Economic Efficiency and Sustainable Agricultural Intensification Practices in Smallholder Maize Farming: Evidence from Ethiopia By Oumer, A.; Burton, M.
  2. The evolution of spanish total factor productivity since the global financial crisis By Chenxu Fu; Enrique Moral-Benito
  3. Regional alignement and productivity growth By Ludovic Dibiaggio; Benjamin Montmartin; Lionel Nesta
  4. Risk Attitude, Technical Efficiency and Adoption: An Integrated Approach to Climate-Smart Rice Production in the Jianghan Plain, China By Tong, Q.; Swallow, B.; Zhang, L.; Zhang, J.
  5. The Productivity J-Curve: How Intangibles Complement General Purpose Technologies By Erik Brynjolfsson; Daniel Rock; Chad Syverson
  6. Large-Scale Farms and Smallholders: Evidence from Zambia By Lay, Jann; Nolte, Kerstin; Sipangule, Kacana
  7. Does crop diversification reduce downside risk in maize yield enhancing investments? Evidence from Ethiopia using panel data By Jaleta, M.; Marenya, P.; Beshir, B.
  8. Ownership Concentration and Firm Performance in European Emerging Economies: A Meta-Analysis By Iwasaki, Ichiro; Mizobata, Satoshi
  9. The Impact of Migration on Productivity and Native-Born Workers' Training By Campo, Francesco; Forte, Giuseppe; Portes, Jonathan
  10. Exploring the effect of crisis on cooperatives: A Bayesian performance analysis of French craftsmen cooperatives By Anne, Musson; Damien, Rousselière
  11. An analysis of Profitability and Resource Use Efficiency of Poultry Feed Mills in Bangladesh By Haque, M.A.; Ahamed, T.; Akteruzzaman, M.; Hashem, A.; Haque, S.; Akter, S.; Islam, M.M.; Alamgir, M.S.; Isla, M.M.
  12. Estimating the marginal productivity of the English National Health Service from 2003/04 to 2012/13 By James Lomas; Stephen Martin; Karl Claxton

  1. By: Oumer, A.; Burton, M.
    Abstract: Sustainable agricultural intensification practices (SAIPs) have been promoted to improve environmental services and farm productivity. However, whether implementations of SAIPs in isolation or in combinations increase economic efficiency of smallholder farmers is unclear. This study investigates the effects of SAIPs on costs and cost efficiency using stochastic frontier modelling techniques with an application to Ethiopian maize production. The econometric approaches account for heterogeneity across farms and heteroscedasticity in the variance of cost inefficiency. The results reveal that combinations of SAIPs appear to reduce cost and cost inefficiency variability but not when they are implemented in isolation. The average cost efficiency of the sample farms was about 80% indicating the presence of considerable room for improvement. Other factors that significantly change economic inefficiency are also discussed. Overall, the results demonstrate the relevance of exploiting synergistic effects of SAIPs in the wake of ever increasing cost of fertilizer, soil degradation and climate variability and enrich the discussion regarding the need to implement a portfolio of these practices rather than in isolation. Policies should support promotion of suites of SAIPs as packages and tackle factors hindering economic efficiency to enhance food security and incomes of smallholder farmers in developing countries. Key words: cost efficiency, sustainable agricultural intensification practices, soil degradation, climate variability, stochastic cost frontier, smallholder farmers, Ethiopia Acknowledgement : We gratefully acknowledge the Australian Government through Australian Centre for International Agricultural Research (ACIAR) for funding this research. Ethiopian Institute of Agricultural Research (EIAR) and the International Wheat and Maize Improvement Centre (CIMMYT) are acknowledged for access to raw data. The Ethiopian National Meteorological Agency (ENMA) is also greatly acknowledged for access to climate data. We thank farmers, supervisors, enumerators and other technical staff and researchers from various partner institutions who contributed to the data collection process. All remaining errors are ours.
    Keywords: Food Security and Poverty
    Date: 2018–07
  2. By: Chenxu Fu (CEMFI); Enrique Moral-Benito (Banco de España)
    Abstract: Total factor productivity (TFP) is considered the key determinant of long-term and sustainable economic growth. The dismal evolution of TFP characterized the Spanish economy since the foundation of the Eurozone until the outbreak of the Global Financial Crisis [see García- Santana et al. (2016)]. This article provides an anatomy of the recent evolution of Spanish TFP using both aggregate- and micro-level data available until 2016. Three conclusions emerge from our findings: i) while TFP growth remained subdued during the crisis, a TFP revival is taking place over the last years; ii) this pattern is mostly driven by the rise and fall of the capital-to-labor ratio (capital deepening) while the role of labor productivity is more muted, and iii) an across-the-board increase in firms’ capital-to-labor ratios accounts for most of the TFP decline during the first years of the crisis, while the subsequent TFP revival is explained by the reallocation of resources towards firms with low capital deepening.
    Keywords: Spain, firm level data, TFP, misallocation.
    JEL: D24 O11 O47 E44 G21 L25
    Date: 2018–10
  3. By: Ludovic Dibiaggio (Histoire et Critique des Arts - Centre d'étude et de recherche d'archéologie méditerranéenne et atlantique. UHB); Benjamin Montmartin (Observatoire français des conjonctures économiques); Lionel Nesta (Observatoire français des conjonctures économiques)
    Abstract: We propose the concept of regional alignment to suggest that synergistic relations among the scientific expertise, technological specialization and industry composition of regions affect regional productivity growth. In this paper, we test an extended conditional β-convergence model using data on 94 French departments (NUTS3) for the period 2001-2011. Our results indicate that a conditional β-convergence is associated with a σ-divergence process in the total factor productivity (TFP) growth of French regions. This process is strongly affected by the level of regional alignment. Indeed, we find evidence that regional alignment both directly and indirectly influences regional productivity growth. The indirect effect of regional alignment materializes through its leverage on R&D investment, which is one of the most important drivers of productivity growth. Moreover, using a heterogeneous coefficients model, we show that the positive effect of regional alignment on TFP growth increases with the industrial diversity of regions, which suggests that regional alignment increases the value of Jacobs externalities more than Marshall-ArrowRomer (MAR) externalities. KEY
    Keywords: Regional alignement; β-convergence; Productivity growth; Multi-regional model
    JEL: O30 O40 R11
    Date: 2018–09
  4. By: Tong, Q.; Swallow, B.; Zhang, L.; Zhang, J.
    Abstract: Rice production in China is under pressure to adapt to changing weather conditions and mitigate greenhouse gas emissions. This paper explores the possibilities for achieving climate-smart agriculture among rice farmers in the Jianghan Plain of China. Data for 873 rice plots are analyzed using Stochastic Frontier Analysis to simultaneously estimate a production function and factors associated with technical efficiency. The production analysis shows the importance of climate variables to production, while use of climate-smart practices, including insurance, conservation tillage, and crop rotations all have the extra benefit of reducing technical inefficiency. However, risk aversion complicates these relationships. We found that most farmers are risk averse and that risk aversion has a negative effect on technical efficiency and U-shaped effects on the purchase of insurance and use of soil-conserving practices. Soil conserving practices are least likely to be used by risk neutral farmers, while insurance is most likely to be purchased by risk neutral farmers. Crop insurance that appeals to the most risk averse farmers appears to be a high priority for encouraging climate-smart agriculture in this region where climate has such large impacts on crop production. Acknowledgement : The authors gratefully acknowledge ?nancial support from the Natural Sciences Foundation of China (41501213); the Fundamental Research Funds for the Central Universities (2662017PY045); the Key Project for Studies of Philosophy and Social Sciences by Ministry of Education (15JZD014); the program of China Scholarship Council (No. 201706760038).
    Keywords: Crop Production/Industries
    Date: 2018–07
  5. By: Erik Brynjolfsson; Daniel Rock; Chad Syverson
    Abstract: General purpose technologies (GPTs) such as AI enable and require significant complementary investments, including business process redesign, co-invention of new products and business models, and investments in human capital. These complementary investments are often intangible and poorly measured in the national accounts, even if they create valuable assets for the firm. We develop a model that shows how this leads to an underestimation of output and productivity in the early years of a new GPT, and how later, when the benefits of intangible investments are harvested, productivity will be overestimated. Our model generates a Productivity J-Curve that can explain the productivity slowdowns often accompanying the advent of GPTs, as well as the follow-on increase in productivity later. We use our model to assess how AI-related intangible capital is currently affecting measured total factor productivity (TFP) and output. We also conduct a historical analysis of the roles of intangibles tied to R&D, software, and computer hardware, finding substantial and ongoing effects of software in particular and hardware to a lesser extent.
    JEL: D2 E01 E22 O3
    Date: 2018–10
  6. By: Lay, Jann; Nolte, Kerstin; Sipangule, Kacana
    Abstract: In light of the surge in large-scale farms in developing countries, concerns have been raised that smallholders may be negatively affected. There is, however, very little evidence beyond case studies to support these claims. Drawing on nationally representative household data sets and an inventory of large-scale farms in Zambia, this study investigates the relationship between large-scale farms and smallholders. First, we analyse the geographical contexts of wards that host large-scale farms and show that large-scale farms are found in wards with good infrastructure and soil quality. Second, we adopt a difference-in-differences approach to estimate the impacts of large-scale farms on smallholders' area cultivated, maize yields, and access to fertiliser. We find that smallholders in wards with large-scale farms increase their area cultivated and maize yields, but have lower fertiliser usage. This hints at positive spillovers at the extensive and intensive margins but not at improved access to agricultural inputs. It is likely that these results are also driven by the emergence of medium-scale farms in these regions.
    Keywords: large-scale farms,yields,smallholders,spillovers,Zambia
    JEL: Q12 Q15 Q18
    Date: 2018
  7. By: Jaleta, M.; Marenya, P.; Beshir, B.
    Abstract: Using a unique household level panel data collected from the major maize producing regions of Ethiopia, this study assesses the role of crop diversification in minimizing the downside risks associated with the use of improved seed and chemical fertilizer in maize production. Empirical results show that maize-legume intercropping and rotation increases the average maize yield and reduces downside risk as captured by the estimated yield distribution using Endogenous Switching Regression models and quintile moment approaches. Controlling for plot and household level characteristics that may induce selection bias in technology adoption, maximum yield was obtained on plots with maize-legume rotation or intercropping sequences. The contribution of crop diversification in reducing downside risk in maize yield was higher when diversification was applied to plots that received improved seed and chemical fertilizers. In addition to the technical support provided to smallholder farmers on the use of improved seed and chemical fertilizer in maize production, the existing agricultural extension program in Ethiopia may also need to give due emphasis to both spatial and temporal crop diversification practices to enhance crop productivity further and reduce the potential downside risk hampering smallholder farmers initiatives in investing in purchased agricultural inputs in maize production. Acknowledgement : The authors would like to acknowledge two projects financially supported the collection of panel data used in this study: Sustainable Intensification of Maize-Legume cropping systems for food security in Eastern and Southern Africa (SIMLESA) project funded by the Australian Center for International Agricultural Research (ACIAR) and Diffusion and Impact of Improved Varieties in Africa (DIIVA) project funded by Bill and Melinda Gates Foundation (BMGF) through Bioversity International which collaborated with the Standing Panel for Impact Analysis (SPIA) in the CGIAR and CIMMYT. Views in this paper are of the authors. The usual disclaimer also works here.
    Keywords: Risk and Uncertainty
    Date: 2018–07
  8. By: Iwasaki, Ichiro; Mizobata, Satoshi
    Abstract: This paper aims to perform a large-scale meta-analysis to examine the relationship between ownership concentration and firm performance in emerging economies of Central and Eastern Europe and the former Soviet Union. A meta-synthesis of 1517 estimates collected from 69 previous studies indicated the presence of a statistically significant and positive effect of ownership concentration on firm performance. The synthesized effect size, however, is only modest at best. A meta-regression analysis conducted to identify the factors underlying the small effect size revealed that differences in target industries, estimation periods, design of ownership variables, data sources, estimators, and choices of control variables could have had systematic and profound effects on the empirical results presented in previous studies. We have also noted that publication selection bias is strongly suspected in this research field, and that, due to the magnitude of this bias, existing studies cannot be expected to provide genuine evidence regarding the effect of ownership concentration on firm performance in European emerging economies. Further empirical studies are required to identify the true effect in this region.
    Keywords: ownership concentration, enterprise restructuring, firm performance, European emerging economies, meta-analysis, publication selection bias
    JEL: D22 G32 G34 L25 P21 P31
    Date: 2018–10
  9. By: Campo, Francesco (University of Milan Bicocca); Forte, Giuseppe (King's College London); Portes, Jonathan (King's College London)
    Abstract: We investigate the relationship between migration and productivity in the UK, using an instrumental variable along the lines suggested by Bianchi, Buonanno and Pinotti (2012). Our results suggest that immigration has a positive and significant impact (in both the statistical sense and more broadly) on productivity, as measured at a geographical level; this appears to be driven by higher-skilled workers. The results for training are less clear, but suggest that higher-skilled immigration may have a positive impact on the training of native workers. We discuss the implications for post-Brexit immigration policy.
    Keywords: immigration, productivity, training, Great Britain
    JEL: E24 J24 J61 M53
    Date: 2018–09
  10. By: Anne, Musson; Damien, Rousselière
    Abstract: This paper aims at understanding the economic performance of craftsmen cooperatives during the crisis period. These cooperatives have the distinctive feature of being supply cooperatives. We use an exhaustive dataset for the French craftsmen cooperatives (2004-2014). We estimate Bayesian Translog econometric models in order to underline the impact of the 2008 crisis on these cooperatives. On the one hand, cooperatives’ turnover contracts during the crisis, the effect is lower for elder cooperatives and varies across sectors. On the other hand, there is convergence towards the mean for the various generations of cooperatives. Theses findings are robust to alternative econometric specifications.
    Keywords: crisis, cooperatives, performance, production function
    JEL: C11 D22 L25 P13
    Date: 2018
  11. By: Haque, M.A.; Ahamed, T.; Akteruzzaman, M.; Hashem, A.; Haque, S.; Akter, S.; Islam, M.M.; Alamgir, M.S.; Isla, M.M.
    Abstract: The study examines the profitability and resource use efficiency analysis of poultry feed mills of Bangladesh covering Dhaka, Gazipur, Narsingdi, Kishoreganj and Mymensingh districts. Thirty feed mills which categorized as; high, medium and low quality on the basis of feed conversion ratio (FCR), were purposively selected. The primary and secondary data were collected and analyse on Cobb-Douglas model. Four out of six variables included in the model were explainied significantly. The feed production cost was estimated Tk. 39295, Tk. 38643 and Tk. 37218 per metric tonne (MT) respectively. The cost of high quality feed was more than medium and low quality feed and the gross return was Tk. 43160, Tk. 42330 and Tk. 40500 per MT respectively. It indicates that high quality feed production was more profitable than the medium and low feed production. The results of Cobb-Douglas model indicated that if the supply of quality of raw materials increased, their efficiency would increase for low and medium. It was also found that the ratio of MVP and MFC were less than one which indicated that the resources were over utilized for high quality feed mills and three input out of six underutilized for medium and low quality feeds. Acknowledgement : All praises for the Almighty Allah Whose blessings have enabled the author to complete the task of this paper. I do hereby express my deep sense of gratitude and indebtedness to my respected professor Dr. Md. Akteruzzaman, Department of Agricultural Economics, Md. Abul Hashem, Professor, Department of Animal Science, Bangladesh Agricultural University, Mymensingh and Associate Professor Tofael Ahamed, Tsukuba University, Japan for their guidance, suggestions and supervision. I am grateful to Ministry of Science and Technology, Government of the Peoples Republic of Bangladesh for providing financial support Special thanks to all of my friends, their encouragement and moral support .
    Keywords: Livestock Production/Industries
    Date: 2018–07
  12. By: James Lomas (Centre for Health Economics, University of York, York, UK); Stephen Martin (Department of Economics and Related Studies, University of York, York, UK); Karl Claxton (Centre for Health Economics, University of York, York, UK)
    Abstract: Estimates of the marginal productivity of the health sector are required for a wide range of resource allocation decisions. Founding these estimates on robust empirical analysis can inform these decisions and improve allocative efficiency as a result. This paper estimates the marginal productivity of the English NHS for a ten year period between 2003/04 and 2012/13. Data on expenditure and mortality by programme budget categories from this period are used in conjunction with socio-economic and demographic variables from the censuses from 2001 and 2011, as part of an econometric strategy that employs an established instrumental variable approach that is subjected to a number of sensitivity analyses. The results of the econometric analysis, along with additional data on burden of disease, are used to generate an estimate of marginal productivity. This paper finds that the point estimates of the amount of resources, in nominal terms, to produce an additional unit of health benefit has ranged from £5,000 to £15,000 per quality-adjusted life year between 2003/04 and 2012/13. These results are discussed in the context of the existing literature, and the potential policy implications for decisions about resource allocation are explored.
    Keywords: productivity; econometric modelling; programme budgeting; health opportunity costs; allocative efficiency
    Date: 2018–10

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