nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2019‒04‒15
thirteen papers chosen by

  1. Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture By Douglas; Udry Gollin, Christopher
  2. Does Low Skilled Immigration Increase Profits? Evidence from Italian Local Labour Markets By Brunello, Giorgio; Lodigiani, Elisabetta; Rocco, Lorenzo
  3. Effects of Electrification on the Production and Distribution in the Coal Industry: Evidence from 1900s Japan By Morimoto, Mayo
  4. Firm heterogeneity and exports in Portugal - Identifying export potential By Frederico Oliveira Torres
  5. Hospital Competition in the National Health Service: Evidence from a Patient Choice Reform By Kurt R. Brekke; Chiara Canta; Luigi Siciliani; Odd Rune Straume
  6. Spillovers and Substitutability in Production By Papps, Kerry L.; Bryson, Alex
  7. Market Power and Innovation in the Intangible Economy By Maarten de Ridder
  8. Access to Imported Intermediates and Intra-Firm Wage Inequality By Ge, Ying; Fang, Tony; Jiang, Yeheng
  9. The impact of blackouts on the performance of micro and small enterprises: Evidence from Indonesia By Anna Falentina; Budy Resosudarmo
  10. The Impact of ESG Scores on both Firm Profitability and Value in the Automotive Sector (2002-2016) By Carlo Bellavite Pellegrini; Raul Caruso; Rocco Cifone
  11. The performance of public enterprises By PERELMAN Sergio,; PESTIEAU Pierre,
  12. Waiting for Godot: the Failure of SMEs in the Italian Manufacturing Industry to Grow By Primo AutoreAuthor-X-Name-First: MaurizioAuthor-X-Name-Last: BaussolaAuthor-Email: maurizio.baussola@unicatt.itAuthor-Workplace-Name: DISCE, Università CattolicaAuthor-Name: Secondo AutoreAuthor-X-Name-First: EleonoraAuthor-X-Name-Last: BartoloniAuthor-Email: bartolon@istat.itAuthor-Workplace-Name: ISTAT, Regional Office for Lombardy; Quarto Autore
  13. Sub-Lethal Concentrations of Neonicotinoid Insecticides at the Field Level Affect Negatively Honey Yield: Evidence from a 6-year Survey of Greek Apiaries By Robert G. Chambers; Konstantinos Chatzimichael; Vangelis Tzouvelekas

  1. By: Douglas; Udry Gollin, Christopher
    Abstract: Standard measures of prouctivity display enormous dispersion across farms in Africa. Crop yields and input intensities appear to vary greatly, seemingly in conflict with a cmodel of efficient allocation across farms. In this paper, we present a theoretical framework for distinguishing between measurement error, unobserved heterogeneity, and potential misallocation. Using rich panel data from farms in Tanzania and uganda, we estimate our model using a flexible specification in which we allow for several kinds of measurement error and heterogeneity. We find that measurement, error and heterogeneity together account for a large fraction - as much as ninety percent - of the dispersion in measured productivity. In contrast to some previous estimates, we suggest that the potential for efficiency gains through reallocation of land across farms and farmers may be relatively modest.
    Date: 2019
  2. By: Brunello, Giorgio (University of Padova); Lodigiani, Elisabetta (University of Padova); Rocco, Lorenzo (University of Padova)
    Abstract: We estimate the (causal) effects of low skill immigration on the performance of Italian manufacturing firms. We find that an increase of the local supply of low skilled immigrants by one thousand units – which corresponds to 8.5 percent of the mean value - raises profits on average by somewhat less than half a percentage point, reduces average labour costs by about 0.1 percent and has no effect on TFP. The positive effects on profits are larger for small firms operating in low tech sectors and for firms located in areas specializing in low skill productions. Our evidence suggests that the recent waves of low skilled immigration in Italy may have hampered the transition to an economic structure characterized by high productivity and wage growth.
    Keywords: low skilled immigration, profits, Italy
    JEL: J61
    Date: 2019–03
  3. By: Morimoto, Mayo (Institute of Social Science, The University of Tokyo)
    Abstract: This paper studies how electrification affected the economic performance and industrial relations of the Japanese coal mining industry in the 1900s. We find that electrification considerably improved productivity and increased the number of workers, but had statistically zero effects on miners’ wages and significantly declined the labor income share, using difference-in-differences estimation. We explain this phenomenon by using the “superstar firm†hypothesis, which provides a consistent explanation of the recent declines in labor income share in the US economy.
    Keywords: Electrification, labor income share, productivity, industrial revolution, technological change, coal mining.
    JEL: D24 L94 O13 O14 Q40
    Date: 2019–03–22
  4. By: Frederico Oliveira Torres
    Abstract: For Melitz (2003), the driving force behind a firm’s decision to export is productivity. If firms pass the productivity cut-off, they all export. Nonetheless, empirical studies show that a substantial share of high-productive firms do not export. Using a dataset that covers Portuguese non-financial firms, between 2010 and 2016, we assess which factors determine the export decision, besides productivity. According to our results, firm’s characteristics, such as size, turnover, import as well as export status, age, worker skills and knowledge agglomeration, are crucial in the process of internationalisation of firms.
    Keywords: Exports, firm heterogeneity, firm-level data
    JEL: D22
    Date: 2019–04
  5. By: Kurt R. Brekke (Norwegian School of Economics (NHH)); Chiara Canta (Toulouse Business School); Luigi Siciliani (University of York, Department of Economics and Related Studies); Odd Rune Straume (University of Minho, Department of Economics/NIPE)
    Abstract: We study the impact of exposing hospitals in a National Health Service (NHS) to non-price competition by exploiting a patient choice reform in Norway in 2001. The reform facilitates a dfference-in-difference research design due to geographical variation in the scope for competition. Using rich administrative data covering the universe of NHS hospital admissions from 1998 to 2005, we find that hospitals in more competitive areas have a sharper reduction in AMI mortality, readmissions, and length of stay than hospitals in less competitive areas. These results indicate that competition improves patient health outcomes and hospital cost efficiency, even in the Norwegian NHS with large distances, low fixed treatment prices, and mainly public hospitals.
    Keywords: Patient Choice; Hospital Competition; Quality; Cost-efficiency
    JEL: I11 I18 L13
    Date: 2018
  6. By: Papps, Kerry L. (University of Bath); Bryson, Alex (University College London)
    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: spillovers, teams, substitutes, complements, baseball
    JEL: D24 J24 L23 M52
    Date: 2019–03
  7. By: Maarten de Ridder (Centre for Macroeconomics (CFM); University of Cambridge)
    Abstract: Productivity growth has stagnated over the past decade. This paper argues that the rise of intangible inputs (such as information technology) can cause a slowdown of growth through the effect it has on production and competition. I hypothesize that intangibles cause a shift from variable costs to endogenous fixed costs, and use a new measure to show that the share of fixed costs in total costs rises when firms increase ICT and software investments. I then develop a quantitative framework in which intangibles reduce marginal costs and endogenously raise fixed costs, which gives firms with low adoption costs a competitive advantage. This advantage can be used to deter other firms from entering new markets and from developing higher quality products. Paradoxically, the presence of firms with high levels of intangibles can therefore reduce the rate of creative destruction and innovation. I calibrate the model using administrative data on the universe of French firms and find that, after initially boosting productivity, the rise of intangibles causes a 0.6 percentage point decline in long-term productivity growth. The model further predicts a decline in business dynamism, a fall in the labor share and an increase in markups, though markups overstate the increase in firm profits.
    Keywords: Business dynamism, Growth, Intangibles, Productivity, Market power
    Date: 2019–03
  8. By: Ge, Ying (School of International Trade and Economics, Beijing); Fang, Tony (Memorial University of Newfoundland); Jiang, Yeheng (Chinese Academy of Forestry)
    Abstract: We use Chinese firm-level data from the World Bank Investment Climate Survey to examine the link between importing intermediates and intra-firm wage inequality. Our results show that intermediate input importers not only have a significant wage premium but also have a greater intra-firm wage dispersion than non-importing firms. This pattern is robust when we control for productivity and use trade costs as the instruments. We further investigate the mechanism of how importing intermediates might contribute to both inter-firm and intra-firm wage inequality. Our evidence is consistent with three important channels. First, imported intermediate inputs complement skilled labour. Second, intermediates importers are more likely to use performance pay. Third, imported inputs complement innovation and employee training.
    Keywords: global production sharing, wage inequality, world bank investment climate survey
    JEL: F16
    Date: 2019–03
  9. By: Anna Falentina; Budy Resosudarmo
    Abstract: Reliability of electricity supply is one of pressing challenges to many micro and small enterprises (MSEs) in developing countries. MSEs play a pivotal role in employment generation in these countries, but productivity of MSEs is relatively low. Little is known about how blackouts affect performance of MSEs. This paper is the first study to estimate the impact of power blackouts on productivity of manufacturing MSEs and to discuss the role of the government in addressing problem. We employ a pseudo-panel dataset covering six firm cohorts within 21 Indonesian national electricity company working areas from 2010 to 2015. Our identification strategy involves first examining blackouts determinants and then using these determinants as instruments in an IV dynamic panel fixed effects estimation while controlling for factors potentially affect productivity and correlated with blackouts. We find that electricity blackouts reduce the average labor productivity and the resultant loss amounts to approximately IDR 71.5 billion (USD 4.91 million) per year in Indonesia. Therefore, it is crucial to improve electricity supply reliability in developing countries. We find that introducing a captive generator as a way to cope with power outages, is positively associated with productivity, and MSEs that have captive generators benefit more when the power supply is poor. Our findings will assist policy makers to prioritize addressing power blackouts relative to other constraints MSEs face.
    Keywords: micro and small enterprises, power blackouts, productivity, captive generators, pseudo-panel data analysis
    JEL: H54 L53 L94
    Date: 2019
  10. By: Carlo Bellavite Pellegrini (Department of Economic Policy and CSEA, Catholic University of Sacred Heart); Raul Caruso (European Center of Peace Science, Integration and Cooperation CESPIC; Catholic University 'Our Lady of Good Counsel'); Rocco Cifone (CSEA, Catholic University of Sacred Heart)
    Abstract: This study analyses the impact of ESG scores on firms’ profitability in the automotive sector between 2002 and 2016. In particular, we exploit a novel dataset of European and North American listed firms. Results show that the environmental component of the ESG scores is positively associated with firms’ profitability. Among the components of overall ESG, the environmental score is the only that exhibits the most robust association. Eventually when considering firm value proxied by means of Tobin’s Q, results show a negative association between the Tobin’s Q and the environmental component of ESG. Further estimations have highlighted a more nuanced evidence in particular with regard to profitability namely: (i) there is a an inverse U-shaped relationship between the governance score of ESG and ROA of firms; (ii) when considering interactions, it comes out that as the firm size increases both environmental and social score are negatively associated with ROA; (iii) when considering non-linearities results show that when governance score is small ROA of firms slightly decreases but as the governance scores increases it eventually increases.
    Keywords: ESG, Profitability, ROA, Firm Value, Tobin's Q
    Date: 2019–01
  11. By: PERELMAN Sergio, (Université de Liège); PESTIEAU Pierre, (Université de Liège, CORE, UCLouvain and Paris School of Economics)
    Abstract: The purpose of this paper is to argue in favour of public enterprises that would be accountable for their performance, that is the way they fulfil the missions assigned to them by the public authority. This requires a rigorous and regular performance assessment. If adopted earlier such an approach would have avoided unneeded and costly privatizations as well as being trapped by inefficient public-private partnership arrangements. Recent evidence on enterprise performance seems to point out that institutions matters more than ownership.
    Keywords: privatization, performance, public enterprises, public-private partnership
    Date: 2019–01–29
  12. By: Primo AutoreAuthor-X-Name-First: MaurizioAuthor-X-Name-Last: BaussolaAuthor-Email: maurizio.baussola@unicatt.itAuthor-Workplace-Name: DISCE, Università CattolicaAuthor-Name: Secondo AutoreAuthor-X-Name-First: EleonoraAuthor-X-Name-Last: BartoloniAuthor-Email: bartolon@istat.itAuthor-Workplace-Name: ISTAT, Regional Office for Lombardy (DISCE, Università Cattolica); Quarto Autore (DISCE, Università Cattolica)
    Abstract: Abstract of the paper. We use a panel of Italian manufacturing firms for the period 2001-2014 to analyse the distribution of firm size, and then test for the validity of Gibrat’s law using unit root tests. Although Gibrat’s Law is rejected and the estimates suggest that small firms grow faster than larger ones, we do not observe a signifi- cant change in the average size of companies at the end of the period under investigation. Also, by using a long-run Transition Probability Matrix, we verify that the steady-state distribution of firm size remains stable. The higher propensity to grow shown by smaller firms is confined to the size class in which the firm is established. We further investigate the relationship between the rate of growth in a firm’s size conditional on specific firm and industry characteristics. Export intensity plays a signifi- cant role in affecting the size growth rate together with industry characteristics related to technological levels. Finally, we esti- mate the probability that a firm increases in size relative to the mean size prevailing in its own size class over a 14-year interval. This approach enables us to highlight those factors that affect this probability, thereby enabling us to underline how Gibrat’s Law tests, although important, require complementary analysis to ascertain whether a firm’s propensity to increase in size is a long run effect and thus a significant modification of the distri- bution of company size or only implies a marginal increase in size within a reference size class.
    Keywords: Gibrat’s Law, Lognormal distribution, firm size dis- tribution.
    JEL: L11 L2 L6
    Date: 2018–03
  13. By: Robert G. Chambers; Konstantinos Chatzimichael; Vangelis Tzouvelekas (Department of Economics, University of Crete, Greece)
    Abstract: We used data from a 6-year survey of 60 apiaries in Greece and economic modelling to assess at the field level the effects of neonicotinoid insecticides on honey production. Based on production function estimates, we found that sub-lethal concentrations of two widely used neonicotinoid insecticides (imidacloprid and thiamethoxam) detected in the nectar of flowers resulted in substantial losses in honey production for commercial beekeepers in our sample.
    Keywords: neonicotinoids, apiaries, Greece, damage
    JEL: Q12 Q20 Q22
    Date: 2019–04–02

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