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on Efficiency and Productivity |
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Issue of 2018‒12‒24
fourteen papers chosen by |
| By: | Gralka, Sabine |
| Abstract: | This paper provides a systematic review of the literature that employs stochastic frontier analysis to measure the efficiency of higher education institutions. The overview opens with a look at the general development of the literature, before emphasis is laid on the methodical aspects. Focus is thereby placed on the necessary underlying assumptions and the employed specifications, discussing their advantages and drawbacks. Afterwards, the factors that were specified in the literature, including the input and output variables, as well as the determinants of efficiency, are discussed in detail. Based on the insights of the literature review, the paper highlights some of the existing deficiencies and ways forward. To our knowledge, the present study provides the first systematic review on the usage of the stochastic frontier analysis to measure efficiency in the higher education sector. |
| Keywords: | Review,Efficiency,Higher Education,Stochastic Frontier Analysis |
| JEL: | C14 D61 I22 I23 H52 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:0518&r=eff |
| By: | Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Russell Thomson (Swinburne University of Technology) |
| Abstract: | Offshoring R&D commonly invokes concerns regarding the loss of high value jobs and a hollowing out of technological capabilities, but it can also benefit domestic firms by enabling them to tap into the global technological frontier. We study the effect of R&D offshoring on industrial productivity in the home country using industry-level data for 18 OECD countries over a 26-year period. Simultaneity between productivity and R&D offshoring is addressed by using foreign tax policy as an instrument for offshored R&D. We show that R&D offshoring contributes positively to productivity in the home country, irrespective of the host country destination. |
| Keywords: | R&D offshoring, globalization, productivity, foreign R&D |
| JEL: | F23 O25 O33 O47 L6 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iip:wpaper:5&r=eff |
| By: | Diego Restrepo-Tobón; Jim Sánchez-González |
| JEL: | D24 G21 G34 L13 |
| Date: | 2018–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:016986&r=eff |
| By: | Alessandro Mistretta (Bank of Italy); Francesco Zollino (Bank of Italy) |
| Abstract: | In this paper we provide fresh evidence on TFP performance in the Italian economy since 1995, taking into account the changing composition of primary inputs across different capital goods and employment skills, as well as technical progress embodied in different vintages of the productive assets. We first estimate a technical depreciation rate by using individual data on Italian industrial firms. We then obtain an experimental measure of the capital stock adjusted for technical efficiency, by augmenting the standard depreciation rate by our own estimate of technical depreciation (about 5 per cent per year). Once we introduce our measure of capital stock in a standard growth accounting exercise, we find a less dismal performance of the Italian TFP than usually estimated. Focusing on the years between 2007 and 2016, the upward correction in TFP amounts to around 1.5 percentage points in the overall period for the total economy and to about 2.5 percentage points when only considering manufacturing. These findings shed a somewhat more positive light on future TFP developments in Italy, suggesting a more rapid increase of potential output than otherwise estimated. In addition, the efficiency of installed capital might soon return to growth, as the expected recovery of investment results in the replacement of old vintages with new and more technically advanced ones. |
| Keywords: | TFP, technical progress, embodied technology |
| JEL: | O3 D24 L60 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1204_18&r=eff |
| By: | Bostian, AJ A.; Bostian, Moriah B.; Laukkanen, Marita; Simola, Antti |
| Abstract: | We address the general problem of selection bias, endemic to analyzing the effects of any policy where adoption is voluntary, with empirical application to environmental policies for agriculture. Many voluntary practices for mitigating the environmental impacts of agriculture provide external benefits while lowering productivity. Policy analysis of the productivity consequences is complicated by the fact that decision-makers can choose their own policy levers, an action that ruins any notion of random assignment. We introduce an identification strategy to correct this kind of endogeneity, combining classic methods from stochastic frontier analysis and selection models. Applying it to micro-level data from Finnish grain farms, we find that more efficient producers are more likely to enroll in subsidized practices. And, because these practices tend to reduce yield, frontier analysis without the endogeneity correction greatly understates productivity losses. In other words, naively basing the frontier estimator on the subset of less productive farms leads to downward bias in the resulting frontier estimates. In fact, average inefficiency more than doubles after the correction in this case. An outlier investigation also suggests that the lowest decile of farms are responsible for most of the selection bias in the uncorrected model. |
| Keywords: | productivity, stochastic frontier analysis, endogeneity, selection model, agri-environmental policy, Environment, energy and climate policy, Q53, Q58, Q18, Q12, D24, C54, C34, C36, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:112&r=eff |
| By: | Xiaodong Gong; Jiti Gao; Xuan Liang; Xin Meng |
| Abstract: | In this paper, we study intra-city agglomeration externality and inter-city spillover effects on productivity of 185 Chinese cities at and above the prefectural level for the years between 1995 and 2009. In particular, we investigate how a shock may be amplified or weakened by these externality effects and how productivity in a city varies with and affects that of other cities in the economy. We estimate the impacts of population size on productivity in 185 Chinese cities using spatial fixed-effect panel data models. Both the endogenous and exogenous spatial dependence are allowed for. The direct and indirect effects of the factors are calculated and compared for various city groups. We find that a significant positive effect of urban population on the real wage levels, which confirms the existence of agglomeration economy within regions. We also find significant differences in both the direct and indirect effect of factors such as FDI between more and less population dense areas. This seems to suggest that agglomeration economy may also exist among regions. Disparity between regions in economic growth and productivity could be explained by the statistically significant regional variations in the direct and indirect effects. |
| JEL: | C23 R12 R23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:msh:ebswps:2018-20&r=eff |
| By: | Bustos, Paula; Castro Vincenzi, Juan Manuel; Monras, Joan; Ponticelli, Jacopo |
| Abstract: | The introduction of new technologies in agriculture can foster structural transformation by freeing workers who find occupation in other sectors. The traditional view is that this increase in labor supply in manufacturing can lead to industrial development. However, when workers moving to manufacturing are mostly unskilled, this process reinforces a country's comparative advantage in low-skill intensive industries. To the extent that these industries undertake less R&D, this change in industrial composition can lead to lower long-run growth. We provide empirical evidence of this mechanism using a large and exogenous increase in agricultural productivity due to the legalization of genetically engineered soy in Brazil. Our results indicate that improvements in agricultural productivity, while positive in the short-run, can generate specialization in less-innovative industries and have negative effects on productivity in the long-run. |
| Keywords: | Agricultural Productivity; Brazil; Genetically Engineered Soy; labor mobility; Skill-Biased Technical Change |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13379&r=eff |
| By: | Iandolo, Stefano; Ferragina, Anna Maria |
| Abstract: | In this paper, we analyze the joint effect of persistency in innovation and export on firms’ total factor productivity (measured in accordance with Levinsohn and Petrin, 2003). For this purpose, we use data on Italian manufacturing firms covering an eight-year time span (1998-2006) which allow us to measure the effect of different time activities, both in innovation and in export and the existence of different pathways linking them. We distinguish between persistent and temporary exporting firms as well as frequent and temporary innovators, to test (through OLS and a two-step system GMM) the existence of any combined learning-by-exporting and learning-by-doing effects. We find that persistent innovation efforts seem to be associated with a permanent presence in foreign markets since persistently innovative and exporting firms have better productivity results than persistently exporting (innovating) firms with no persistent innovation (export). Combining both strategies can be an opportunity to internalize knowledge flows coming from long-lasting exposure to foreign markets. |
| Keywords: | Export,Innovation,Firms,Productivity,GMM |
| JEL: | F14 F10 F23 O30 D24 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:189680&r=eff |
| By: | João Firmino (Universidade Nova de Lisboa) |
| Abstract: | Using student-level longitudinal data of 6th graders I estimate class composition effects impacting on individual academic achievement. The richness of the dataset allows to tackle endogeneity stemming from between and within-school non-random sorting of students and of teachers and other confounding factors through the inclusion of many control covariates that characterize the students’ cumulative process of learning and several fixed effects, namely school, teacher and cohort fixed effects. I find that increasing the percentage of high achievers, in a 6th grade class, has a negative effect on student performance. Larger shares of low-income classmates improve performance for non-low-income students. The shares of male and foreign students yield non or faintly significant results. Using the setup of a particular school, representative of the sample, I also compute improving classrooms’ allocation of students by rearranging the existing students through the existing classes using the estimates of the education production function and different social welfare functions. This way I assess how the actual distribution of students across classes of a given school-grade deviate from what can be considered an improving distribution of classmates. Pareto improving allocations were not found, nevertheless utilitarian welfare functions yield marginally improving allocations. |
| Keywords: | Class Composition, Peer Effects, Student Achievement, Classroom, Welfare |
| JEL: | I21 I24 I28 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2018-14&r=eff |
| By: | Nevin, Ciarán (Central Bank of Ireland) |
| Abstract: | This FS Note explores trends in the profitability of the Irish retail banking sector over the past 15 years, using a sample of 39 other EU banks as a comparison group. Changes in the net interest margin (NIM) are decomposed into the share and yield effects on assets and liabilities, respectively. This is the first such decomposition to focus on the banking system in Ireland. The results suggest that the low interest rate environment has coincided with an increase in the NIM of Irish banks but with a decrease in the NIM for a sample of other EU banks. In the case of Irish banks, the increase in the NIM is largely the result of a yield effect on liabilities (cheaper funding). Furthermore, there is some evidence that this effect may be diminishing in recent years. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:fsnote:10/18&r=eff |
| By: | Jim Sánchez; Diego Restrepo; Andres Ramírez |
| Date: | 2018–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:016977&r=eff |
| By: | Bosker, Maarten; Park, Jane; Roberts, Mark |
| Abstract: | A variety of approaches to delineate metropolitan areas have been developed. Systematic comparisons of these approaches in terms of the urban landscape that they generate are however few. This paper aims to fill this gap. The paper focuses on Indonesia and makes use of the availability of data on commuting flows, remotely-sensed nighttime lights, and spatially fine-grained population, to construct metropolitan areas using the different approaches that have been developed in the literature. The analysis finds that the maps and characteristics of Indonesia's urban landscape vary substantially, depending on the approach used. Moreover, combining information on the metro areas generated by the different approaches with detailed micro-data from Indonesia's national labor force survey, the paper shows that the estimated size of the agglomeration wage premium depends nontrivially on the approach used to define metropolitan areas. |
| Keywords: | agglomeration economies; Indonesia; metro areas; urban definitions |
| JEL: | C21 O18 O47 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13359&r=eff |
| By: | Dynarski, Susan (University of Michigan); Jacob, Brian A. (University of Michigan); Kreisman, Daniel |
| Abstract: | A substantial and rapidly growing literature has developed around estimating earnings gains from two-year college degrees using administrative data. These papers almost universally employ a person-level fixed effects strategy to estimate earnings premia net of fixed attributes. We note that the seminal piece on which these papers build, Jacobson, Lalonde and Sullivan (Journal of Econometrics, 2005), provides theoretical and empirical evidence for the importance of additionally differencing out individual time-trends. The subsequent literature has not followed suit. Through replication we ask whether this matters. We show that it does, and further that these person-level time-trends need not be computationally burdensome in large administrative data. We recommend them as a unifying econometric standard for future work. |
| Keywords: | fixed effects, community college, wages |
| JEL: | C51 C52 C54 J31 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11935&r=eff |
| By: | Vandenbroucke, Guillaume (Federal Reserve Bank of St. Louis) |
| Abstract: | The entry of baby boomers into the labor market in the 1970s slowed growth for physical and human capital per worker because young workers have little of both. Thus, the baby boom could have contributed to the 1970s productivity slowdown. I build and calibrate a model a la Huggett et al. (2011) with exogenous population and TFP to evaluate this theory. The baby boom accounts for 75% of the slowdown in the period 1964-69, 25% in 1970-74 and 2% in 1975-79. The retiring of baby boomers may cause a 2.8pp decline in productivity growth between 2020 and 2040, ceteris paribus. |
| Keywords: | Demography; baby boom; aggregate productivity; productivity slowdown; human capital |
| JEL: | E24 J11 J24 |
| Date: | 2018–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2018-037&r=eff |