nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2019‒04‒08
twelve papers chosen by

  1. Carbon-sensitive Meta-Productivity Growth and Technological Gap: An Empirical Analysis of Indian Thermal Power Sector By Surender Kumar; Rakesh Kumar Jain
  2. Bank Efficiency Differences Across Central and Eastern Europe By Barnabás Székely
  3. The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa By Darko, Christian K.; Occhiali, Giovanni; Vanino, Enrico
  4. Analyzing the Transformation of Work and Its Effects on Productivity in the Age of Automatization? By Kuusi, Tero; Kulvik, Martti; Laiho, Maarit; Ropponen, Annina; Vähämäki, Maija
  5. Factor-Analysis-Based Directional Distance Function: The case of New Zealand hospitals By Nan Jiang; Zhongqi Deng; Ruizhi Pang
  6. Engines of Sectoral Labor Productivity Growth By Zsófia L. Bárány; Christian Siegel
  7. Spillovers and substitutability in production. By Kerry L. Papps; Alex Bryson
  8. GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy By Brynjolfsson, Erik; Collis, Avinash; Diewert, Erwin; Eggers, Felix; FOX, Kevin J.
  9. Adapting business framework conditions to deal with disruptive technologies in Denmark By Mikkel Hermansen; Valentine Millot
  10. The interplay between problem loans and Japanese bank productivity. By Mamatzakis, Emmanuel; matousek, roman; vu, anh
  11. TFP Change and its Components for Swedish Manufacturing Firms During the 2008-2009 Financial Crisis By Pontus Mattsson; Jonas Mansson; William H. Greene
  12. Farm performance and investment decisions: evidence from the French (Brittany) dairy sector By Loic Levi; Laure Latruffe; Aude Ridier

  1. By: Surender Kumar (Department of Economics, Delhi School of Economics); Rakesh Kumar Jain (Indian Railways, Government of India & Department of Business Economics, South Campus, University of Delhi)
    Abstract: This paper measures carbon-sensitive efficiency and productivity growth in technologically heterogeneous coal-fired thermal power plants in India for the period of 2000 to 2013. It uses a unique data set of 56 plants, obtained petitioning the Right to Information Act 2005. We apply ‘within-MLE’ fixed effects stochastic frontier model to get consistent estimates of meta-directional output distance function. The thermal power plants are grouped in two categories: central sector and state sector. We find that the state sector plants have higher potential to simultaneously increase electricity generation and reduce carbon emission than the central sector plants. If all the state and central sectors plants were made to operate on the meta-frontier, reduction of 98 million tonnes of CO2 could have been achieved. Carbon-sensitive productivity growth in the central sector plants is higher than the plants in state sector, though in both the sectors productivity growth is governed by carbon-sensitive innovation effect. Commercialisation or autonomy in electricity generation also induces carbon-sensitive productivity growth and reduces carbon-sensitive productivity growth gap.
    Keywords: Carbon-sensitive productivity, Luenberger productivity indicator, Stochastic meta-frontier, Indian thermal power plants
    JEL: C61 D24 Q54
    Date: 2019–03
  2. By: Barnabás Székely (Magyar Nemzeti Bank (Central Bank of Hungary))
    Abstract: The study evaluates bank efficiency in the EU member states of Central and Eastern Europe (CEE) using stochastic frontier analysis (SFA). Relying on a comprehensive dataset covering the post-crisis period from 2010 to 2016, country-specific average profit and cost efficiencies are calculated. Compared with similar pre-crisis studies, the results highlight the reshuffling effects of the financial crisis. Hungary, for instance, that was consistently found to have a comparatively efficient banking system, now performs well below average. Contrasting the results of traditional performance indicators with SFA supports the mechanism put forward by the Quiet Life Hypothesis. The positive relationship of market share and return on assets (or equity) indicates that higher market power enables banks to realize higher profits. SFA, on the other hand, suggests a negative association implying that banks do not tend to fully exploit this potential.
    Keywords: Bank Efficiency; Stochastic Frontier Analysis; Central and Eastern Europe
    JEL: G21 P52 C12
    Date: 2018
  3. By: Darko, Christian K.; Occhiali, Giovanni; Vanino, Enrico
    Abstract: This study uses firm level data on 19 Sub-Saharan Africa countries between 2004 and 2016 to provide a rigorous analysis on the impact of Chinese import competition on productivity, skills, and performance of firms., We measure import competition and ports accessibility at the city-industry level to identify the relevance of firms’ location in determining the impact of Chinese imports competition. To address endogeneity concerns, a time-varying instrument for Chinese imports based on the interaction between an exogenous geographic characteristic and a shock in transportation technology is developed. The results show that imports competition has a positive impact on firm performance, mainly in terms of productivity catch-up and skills upgrading. Of particular interest is the finding that the effects of import competition from China are stronger for more remote firms that have lower port accessibility, an indication that Chinese imports in remote areas improves productivity of laggard firms, employment, and intensity of skilled workers. Our findings indicate that African firms are improving their performance as a consequence of the higher Chinese import intensity, mainly through direct competition and the use of higher quality inputs of production sourced from China.
    Keywords: Research Methods/ Statistical Methods
    Date: 2018–05–24
  4. By: Kuusi, Tero; Kulvik, Martti; Laiho, Maarit; Ropponen, Annina; Vähämäki, Maija
    Abstract: Abstract In this policy brief, we discuss the challenges of measuring productivity effects of automatization in a governmental payment service organization (The Finnish Government Shared Services Centre for Finance and HR, Palkeet) that has developed and applied digital robotics in work processes. To this end, we combine sociologic and economic research tools and traditions to provide a full picture of the transition. First, we analyse work at the level of individual tasks by using large-scale econometric models and HR-data; an approach that provides detailed digital job profiles for assessment. Secondly, we add the understanding of digital working by qualitative inquiry of employees’ meaning making of working with robots. Our study contributes to the discourses of management control and adaptation to change.
    Keywords: Automatization, Labour, Productivity, Services
    JEL: H11 H30 O33
    Date: 2019–03–27
  5. By: Nan Jiang (School of Economics, Auckland University of Technology); Zhongqi Deng (School of Economics, Sichuan University, China); Ruizhi Pang (College of Economics and Social Development, Nankai University, China)
    Abstract: This paper develops a new factor-analysis-based (FAB) approach for choosing the optimal direction in a directional distance function (DDF) analysis. It has the combined merits of factor analysis and slacks-based measure (SBM) and incorporates the relative ease with which various input-output could be adjusted. This development relieves the dependency of price information that is normally unavailable in the provision of public goods. This new FAB-DDF model has been applied on a dataset containing all public hospitals in New Zealand (NZ) observed during 2011-2017. The empirical results indicate that the average reduction across different labor is in the range of 3-10 percent, and the corresponding figure for capital input is 25.7 percent. The case-adjusted inpatient-discharge and price-adjusted outpatient-visit are used as measures of desirable output, the average efficiencies are 92.7 percent and 99 percent respectively. Hospital readmission within 28 days of discharge is used as a measure for undesirable output, and the average efficiency score is 90 percent. These evidence support the suspicion that perverse incentives might exist under the National Health Targets abolished in 2018, which was a set of six indicators used in the last decade to evaluate the performance of local District Health Boards.
    Keywords: factor-analysis-based measure, directional distance function, NZ hospital efficiency, hospital readmission
    JEL: C61 D24 I11 I18
    Date: 2019–01
  6. By: Zsófia L. Bárány; Christian Siegel
    Abstract: We study the origins of labor productivity growth and its differences across sectors. In our model, sectors employ workers of different occupations and various forms of capital, none of which are perfect substitutes, and technology evolves at the sector-factor cell level. Using the model we infer technologies from US data over 1960-2017. We find sector-specific routine labor augmenting technological change to be crucial. It is the most important driver of sectoral differences, and has a large and increasing contribution to aggregate labor productivity growth. Neither capital accumulation nor the occupational employment structure within sectors explains much of the sectoral differences.
    Keywords: biased technological change; structural transformation; labor productivity
    JEL: O41 O33 J24
    Date: 2019–03
  7. By: Kerry L. Papps (University of Bath and IZA, Bonn); Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor)
    Abstract: Can the existence of positive productivity spillovers between co-workers be explained by the presence of complementarities in a firm’s production function? A simple model demonstrates that this is possible when workers perform their tasks sequentially and part of individuals' pay is determined by the firm's output, but also that negative spillovers may arise when workers can raise overall output unilaterally. Data from major league baseball support these predictions. They show that the pairs of players who are most complementary in the production process exert the largest positive spillovers on each other, but that negative spillovers predominate between all player pairs.
    Keywords: productivity; spillovers; baseball
    JEL: J0 M5
    Date: 2019–04–01
  8. By: Brynjolfsson, Erik; Collis, Avinash; Diewert, Erwin; Eggers, Felix; FOX, Kevin J.
    Abstract: The welfare contributions of the digital economy, characterized by the proliferation of new and free goods, are not well-measured in our current national accounts. We derive explicit terms for the welfare contributions of these goods and introduce a new metric, GDP-B which quantifies their benefits, rather than costs. We apply this framework to several empirical examples including Facebook and smartphone cameras and estimate their valuations through incentive-compatible choice experiments. For example, including the welfare gains from Facebook would have added between 0.05 and 0.11 percentage points to GDP-B growth per year in the US.
    Keywords: Welfare measurement, GDP, Productivity, mismeasurement, productivity slowdown, new goods, free goods, online choice experiments, GDP-B
    JEL: C43 D60 E23 O3 O4
    Date: 2019–03–27
  9. By: Mikkel Hermansen; Valentine Millot
    Abstract: Danish firms are close to the technological frontier compared to other OECD countries,making the introduction of new – potentially disruptive – technologies key to boostproductivity growth. Despite a high level of digitalisation and good framework conditions,aggregate productivity growth in Denmark has been only average compared to otheradvanced OECD countries and lags behind in less knowledge-intensive service industries.Policy needs to embrace innovative technologies by leaning against attempts to discourageor exclude them and by tackling unintended or outmoded obstacles in legislation andregulation. Analysis based on Danish firm-level data suggests that digital adoption throughinvestment in ICT capital increases firm productivity and contributes to business dynamicsand firm growth. Improving economic incentives for such investment as well as facilitatingadoption of new business models require a shift of taxation away from capital and labourincome. Ensuring supply of the right skills and maintaining effective upskilling will helpworkers cope with disruptive changes and ensure that economic growth benefits all.
    Keywords: competition, digitalisation, disruption, innovation, productivity, skills, taxation
    JEL: E24 H25 L40 L50 O16 O33 O38
    Date: 2019–04–02
  10. By: Mamatzakis, Emmanuel; matousek, roman; vu, anh
    Abstract: This paper examines for the first time the impact of problem loans on Japanese productivity growth. We exploit a new data set of Japanese problem loans classified into two categories: bankrupt and restructured loans. We opt for a novel and flexible productivity growth decomposition that allows to measure the direct impact of these problem loans on productivity growth. The results reveal that Japanese bank productivity growth was severely constrained by bankrupt and restructured loans early in 2000s, whilst some persistence of the negative impact of problem loans on productivity growth is observed in the late 2000s. Thereafter, there is only some partial recovery in the productivity growth from 2012 to 2015. Further, we also perform cluster analysis to examine convergence or divergence across regions and over time. We observe limited convergence, though Regional Banks seem to form clusters in some regions.
    Keywords: Bank productivity; Bankrupt loans; Restructured loans; Cluster analysis; Japan
    JEL: G0 G01 G2 G21
    Date: 2019–03–14
  11. By: Pontus Mattsson; Jonas Mansson; William H. Greene
    Date: 2018
  12. By: Loic Levi (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); Laure Latruffe (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); Aude Ridier (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)
    Abstract: The objective of this paper is to investigate the role of farm performance in farmers' investment decisions with a theoretical model accounting for adjustment costs and performance. The model is estimated on a balanced sample of specialised dairy farms in Brittany (western France) between 2005 and 2014. Two types of farms are considered: with high and with low capital intensity. The results show that spreading investment over time is, on average, an optimal strategy for maintaining performance in the presence of adjustment costs. In addition, the effect of performance on investment behaviour differs between the two farm types.
    Abstract: L'objectif de ce travail est d'analyser le rôle de la performance des exploitations agricoles dans les décisions d'investissement des exploitants, grâce à un modèle théorique prenant en compte les coûts d'ajustement et la performance. Le modèle est estimé sur un échantillon cylindré d'exploitations laitières spécialisées en Bretagne entre 2005 et 2014. Deux types d'exploitations sont considérées : celles avec une forte intensité en capital, et celles avec une faible intensité en capital. Les résultats montrent que répartir l'investissement sur plusieurs années est en moyenne une stratégie optimale pour maintenir la performance lorsqu'il y a des coûts d'ajustement. De plus, l'effet de la performance sur le comportement d'investissement diffère entre les deux types d'exploitations.
    Keywords: exploitation agricole laitière,coût d'ajustement,farm investment,adjustment cost model,dairy sector,reinvestment,investissement,performance,France,bretagne
    Date: 2019

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