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on Efficiency and Productivity |
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Issue of 2019‒06‒24
eighteen papers chosen by |
| By: | Kimhi, Ayal; Reznik, Ami |
| Abstract: | The dairy branch is one of the most regulated branches of agriculture in Israel. The dairy farm policy reform, initiated in 1999, enabled Israeli dairy farmers, for the first time, to trade production quotas, and encouraged capital investments through financial incentives. The consequence was a rapid exit of producers, an increase in the size of existing producers either through purchasing quotas or through mergers, and an improvement of production efficiency and milk quality. This paper employs Data Envelopment Analysis (DEA) to estimate the changes in production efficiency, using data from the dairy farm profitability surveys of 2003, 2005, 2007 and 2009. We found that dairy farms have become larger and more efficient during the reform period. Results also suggest that scale efficiency has increased over time for small family farms. Meta Production Frontier analysis showed that relatively small Moshav farms were able to catch up with the technology used by the most efficient farms in the industry, and this may explain the gradual increase in their scale efficiency. Larger Moshav farms, on the other hand, were not able to catch up with the technology used by the most efficient farms. Continued policies aimed at further concentration of production in fewer and larger farms are not necessarily the most effective approach to increase dairy farm efficiency. Efforts should focus on helping less efficient farmers to utilize the best available production methods and adopt more efficient production techniques. |
| Keywords: | Agricultural and Food Policy, Livestock Production/Industries, Production Economics |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:huaedp:290056&r=all |
| By: | Vincent Chatellier (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); Pierre Dupraz (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST) |
| Abstract: | The European Union (EU) has, since a long time, an important role in the international livestock industry chains, both in terms of production and trade. In spite of a strong restructuring movement, mainly due to factor productivity gains, European livestock brings together farms that are still very heterogeneous in terms of productive combinations, size, social structuring, intensification and economic performance. To document this, data from the Farm Accountancy Data Network (FADN) is used to analyze the diversity of structural and economic situations of farms specializing in the production of milk, beef and pigs/poultry, for the ten most productive EU Member States in animal production. This step is necessary for identifying the main levers for improving the economic performance of European animal productions. Two types of levers are distinguished. The first concerns the « cost competitiveness ». It refers successively to the substitution of production factors, economies of scale, the geographical concentration of production, the structuring of production chains and the impact of agricultural policies. The second concerns the « non-cost competitiveness ». It covers the sanitary quality of animal productions, the differentiation of products and production processes, and the required conditions for farmers to capture some of the generated value-added. |
| Keywords: | livestock,livestock production,competitiveness,economic performance,FADN,livestock farms,farm accountancy data network,élevage,production animale,performance économique,rica,compétitivité |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02154561&r=all |
| By: | Pablo Blanchard (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Adriana Peluffo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Dayna Zaclicever (Comisión Económica para América Latina) |
| Abstract: | International trade is considered a vehicle for technology diffusion, which in turn can induce productivity growth. Particularly, imports may give domestic firms access to a larger variety and/or better quality of intermediate or capital inputs in which new technologies are embodied. However, the lack of sufficiently skilled labor, an issue especially relevant for small developing countries, may prevent firms from taking advantage of these technologies. Using a panel of Uruguayan manufacturing firms for the period 1997-2008, we explore the impact of imported inputs on firms’ productivity and evaluate whether the effect is mediated by the firm’s absorptive capacity, proxied by the proportion of skilled labor. We use two alternative approaches. Firstly, we apply a two-stage approach by first estimating firms’ productivity and then using impact evaluation techniques to analyze causality between imported inputs and productivity. Secondly, we use a direct approach, estimating TFP with imported inputs as a state variable. Our results show that imported intermediates have an enhancing effect on Uruguayan firms’ productivity, and that absorptive capacity plays an important role on this effect. |
| Keywords: | productivity, imports, absorptive capacity |
| JEL: | F14 D24 O33 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-03-19&r=all |
| By: | Economou, Polychronis; Malefaki, Sonia; Kounetas, Konstantinos |
| Abstract: | Growth theory argues on the role of heterogeneity that can lead to multiple regimes examining countries’ performance. A meta-production stochastic function under a Bayesian perspective has been developed to estimate technical efficiencies across countries over a time period. The metafrontier model is used to highlight heterogeneity among cluster of countries revealing catch up phenomena. The estimation procedure relies on the solution of an optimization problem and on the concept of the upper orthant order of two multinormal random variables. The proposed models are applied in a real dataset consisting of 109 countries for a 20-year period from 1995-2014. The productive performance differential and the associated technology gaps were investigated using two distinct frontiers (OECD vs non-OECD countries). Empirical results reveal that heterogeneity indeed plays a significant and distinctive role in determining technological gaps. |
| Keywords: | Technological heterogeneity,Bayesian approach, Metafrontier, Spillovers, |
| JEL: | C11 C23 C51 D24 O10 |
| Date: | 2019–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94462&r=all |
| By: | Giordano, Claire; Lopez-Garcia, Paloma |
| Abstract: | Firms are heterogeneous, even within narrowly defined sectors. This paper surveys the relevant theoretical and empirical literature on firm heterogeneity and external trade. By innovatively exploiting rich cross-country micro-aggregated data sourced from the ECB Competitiveness Research Network (CompNet), this study then investigates the main implications of firm heterogeneity for trade of EU countries, showing a set of stylised facts. On the one hand, exporting firms are larger, more productive and pay higher wages than non-exporting firms. Only these firms are able to bear export costs, related to various factors, such as tariff and non-tariff trade barriers, the quality of the legal system or access to finance. Hence, only few enterprises actually export, and the intensity of aggregate export concentration within few large firms varies across countries and sectors. On the other hand, opening to trade boosts individual firms’ productivity growth, via a number of channels, and also enhances allocative efficiency across firms, in turn increasing aggregate productivity growth. One of the main standard determinants of export growth, namely changes in the real effective exchange rate, impacts aggregate performance differently across countries and sectors, depending on sectoral composition and on firm characteristics within a given sector JEL Classification: F14, L25 |
| Keywords: | firm heterogeneity, productivity, real effective exchange rates, Trade |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2019225&r=all |
| By: | Prada, María Fernanda; Rucci, Graciana; Urzúa, Sergio |
| Abstract: | Understanding the causal association between skills and productivity is essential for designing effective training programs. This paper evaluates an intervention aimed at boosting leadership and communication skills among store managers and sales associates from a large Latin American retailer. The empirical analysis is carried out using longitudinal information gathered by the firm and through two skills surveys. The Identification exploits the experimental design in the context of a difference-in-difference strategy. The results indicate large positive effects of the training program on store-level productivity. We further link these Findings to individual-level performance measures. In particular, we document positive effects on total sales and numbers of transactions for all workers. Regarding the mechanisms, we provide evidence suggesting that the intervention was more effective in boosting leadership skills than communication skills. Spillovers from trained managers to untrained sales representatives also contribute to the main effects. Our findings point towards the possibility of increasing productivity through training programs targeting critical skills. |
| JEL: | J24 C93 O15 M53 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:9647&r=all |
| By: | FUJII Daisuke; SAITO Yukiko |
| Abstract: | This paper examines how transaction relationships are correlated with firm performance focusing on differences between supplier and customer relationships. In theory, both suppliers and customers positively affect sales and profit but their channels are different. A supplier set affects a firm's productivity lowering its marginal cost of production whereas a customer set only expands the size without affecting productivity. We consider a simple model of production with intermediate inputs, and examine whether theoretical implications are consistent with empirical evidence by estimating panel regressions using Japanese inter-firm transaction network data. We find that sales elasticities of in- and out-degree are positive. In- and out-degrees exhibit complementarity on sales implying that the marginal benefit of having more suppliers increases with the number of customers, and vice versa. Also, the elasticity of in-degree increases with size while that of out-degree is constant. This is also consistent with the theory, which predicts a leveraged effect of lowering a marginal cost when the scale is large. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19032&r=all |
| By: | Huy Quynh Nguyen; Peter Warr |
| Abstract: | This paper studies whether land consolidation – reduction of land fragmentation – promotes or hinders the Vietnamese government’s policy objectives of encouraging agricultural mechanization and stimulation of the off-farm rural economy. It does this by viewing land consolidation as a form of technical change, making it possible to apply the insights developed in the economic literature on technical change. This treatment reveals that the impacts of land consolidation depend partly on its factor bias and partly on the degree to which labor is substitutable in production for other factors. At a theoretical level, if a technical change is factor neutral, it will reduce off-farm labor supply and slow rural structural transformation away from agriculture; if it is labor-augmenting and the elasticity of substitution between factors is low enough, the opposite effects are predicted. The paper studies these issues empirically for rice production in Vietnam, focusing on the impact that consolidation of rice land has on rice production, machinery use, and labor allocation. The findings confirm that land consolidation raises both farm productivity and farm income and stimulates increased machinery use. It also reduces farm labor supply, lowers labor intensity in farming, and thereby releases more farm labor to off-farm development, consistent with government policy objectives. Based on these findings, the paper concludes that land consolidation should be encouraged through development of land ownership rights and the promotion of land rental markets. |
| Keywords: | Land consolidation, factor-biased technical change, rural diversification, machinery use |
| JEL: | Q15 N65 O13 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2018-25&r=all |
| By: | Hu, Bin; Li, Zhengtao; Zhang, Lin |
| Abstract: | This paper estimates the linkages among total Sulphur dioxide (SO2) emissions, total GDP and energy efficiency using China’s provincial panel data from 2002 to 2015. We investigate total emissions rather than per capita emissions or ambient concentrations, since it is total emissions that the environment cares about. Energy efficiency is estimated using stochastic frontier analysis and decomposed into both persistent and transient efficiency. We then investigate the long-run dynamics among SO2 emissions, economic growth and energy efficiency by employing the panel-based error correction model and taking the effects of cyclical variations into account. Our analysis shows that GDP has a positive impact on total SO2 emissions in the short run and gains in energy efficiency have a significant negative effect on emissions in the long run. By controlling the effects of business cycle, the effects of GDP on emissions remain positive in both short and long run. Cross-sectional analysis provides similar insights. We argue that economic growth itself is an emission generator. Therefore, the government needs to establish a long-run strategy to curb the emissions by improving energy efficiency. |
| Keywords: | Sulphur dioxide emissions; energy efficiency; stochastic frontier analysis; error-correction model |
| JEL: | Q0 Q01 Q43 Q56 |
| Date: | 2019–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94588&r=all |
| By: | Munonye, J. O.; Moses, P. |
| Abstract: | The study examined snail production in Imo State, Nigeria using cross-sectional data. It was guided by five specific objectives: describe snail production system in the study area; determine costs and return of snail production; determine the factors that affect snail production in the study area. Questionnaire was the instrument of data collection. Purposive sampling technique was used to sample fifty snail farmers who constituted the respondents for the study. Data were analyzed using descriptive, inferential statistics and costs and return analysis. Results showed that the business of snail farming required low capital investment and was highly profitable with gross margin and net profit of N612, 130.00 and N609, 630.00 per snail per one cycle respectively. The return on investment was N3.04. This showed that snail production is profitable and would boost the farmers’ income and thereby improve their livelihood. Quantity of snails and gender positively and significantly influenced the profit realized. Inadequate funds and religious bias were the major constraints to increase production. |
| Keywords: | Agricultural Finance, Livestock Production/Industries, Productivity Analysis |
| Date: | 2019–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc19:289661&r=all |
| By: | Reader, Mark A.; Wilson, Paul; Ramsden, Stephen; Hodge, Ian D.; Lang, Ben G. A. |
| Abstract: | To find opportunities to improve, in efficiency or performance, farms are often compared on the basis of standard typologies (i.e. categorisations). For example the EU "specialist-cerealsoilseeds- pulses" farm type, known in Britain as "cereals" farms. These categories, being aggregates, contain significant numbers of atypical enterprises. For example, in 2017 there were 30 cattle and 69 sheep on the average "general-cropping" farm in England. This means that comparators are averages across farms with widely divergent scales of different enterprises (and hence farm characteristics), that are not relevant for the comparison. Furthermore, farmers may not necessarily even know their own farm "type" when undertaking benchmarking or comparative analysis. We therefore present a novel method that matches a specific farm against all farms in a survey (drawing upon the Farm Business Survey (FBS) sample), and then selects the nearest "bespoke farm group" of matches based on distance (Z-score) away. Across 34 dimensions, including almost all the enterprises characteristic of English farms, as well as tenure and geographic proximity. Means and other statistics are calculated specifically for that bespoke farm comparator group, or "peer set" of 25 farms or more if less than 1 Z-score away. This generates a uniquely defined comparator, for each individual farm and gives a substantially improved key-performance-indicators for benchmarking purposes. This methodology has potential to be applied across the full range of FBS farm types and across a wider range of contexts. |
| Keywords: | Agricultural and Food Policy, Research Methods/ Statistical Methods |
| Date: | 2019–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc19:289667&r=all |
| By: | Garanina, Tatiana (University of Vaasa); Muravyev, Alexander (Higher School of Economics) |
| Abstract: | This paper studies economic effects of the gender composition of corporate boards, employing a new and unique longitudinal dataset of virtually all Russian companies whose shares were traded on the national stock market between 1998 and 2014. Using multiple identification approaches, alternative measures of gender diversity, and several performance indicators, we find some evidence that companies with gender-diverse boards have higher market values and better profitability. These effects are particularly pronounced when firms appoint several women directors, which is consistent with the critical mass theory. The effects appear to be stronger in bad economic times or for firms experiencing economic difficulties. Overall, the Russian data lend some support to "the business case" for more women on corporate boards. |
| Keywords: | board of directors, gender diversity, firm performance, Russia |
| JEL: | G34 J16 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12357&r=all |
| By: | Pelletier, Adeline |
| Abstract: | Do foreign banks perform better than domestic banks in host developing economies? Relying on financial statements and survey data I compare the performance of three different categories of foreign banks to the group of domestic banks in sub-Saharan Africa: global banks from developed countries, regional African banks and banks from non-African emerging economies. While emerging-market banks and global banks consistently outperform domestic banks, the difference is not significant for regional African banks. The higher performance of global banks and emerging-market banks is related to higher operational efficiency and lower cost of funding, while there is no strong evidence of segmentation by business segment in the loans market. Regional African banks, which started their foreign expansion more recently, are less able to generate interest income compared to domestic banks. These findings highlight the importance of taking into account foreign banks’ heterogeneity when assessing the impact of financial FDI on the host economy. |
| Keywords: | foreign direct investment; international banking; performance |
| JEL: | F21 F23 G21 |
| Date: | 2018–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86368&r=all |
| By: | Fukao, Kyoji; Paul, Saumik |
| Abstract: | This paper examines the drivers of the long-run structural transformation in Japan. We use a dynamic input-output framework that decomposes the reallocation of the total output across sectors into two components: the Engel effect (demand side) and the Baumol effect (supply side). To perform this task, we employ 13 seven-sector input-output tables spanning 100 years (1885 to 1985). The results show that the Engel effect was the key explanatory factor in more than 60% of the sector-period cases in the pre-WWII period, while the Baumol effect drove structural transformation in more than 75% of such cases in the post-WWII period. Detailed decomposition results suggest that in most of the sectors (agriculture, commerce and services, food, textiles and transport, communication and utilities), changes in private consumption were the dominant force behind the demand-side explanations. The Engel effect was found to be the strongest in the commerce and services sector, which contributed to the rapid growth of GDP in Japan throughout the 20th century. |
| Keywords: | long-run structural transformation, the Engel effect, Baumol’s cost disease effect, sectoral productivity growth |
| JEL: | O40 O10 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:sspjdp:dp19-2&r=all |
| By: | Anna T. Falentina; Budy P. Resosudarmo; Danang Darmawan; Eny Sulistyaningrum |
| Abstract: | The world is going digital. Little is known about how this digitalization affects the performance of micro and small enterprises, one of the major foundations of the economy in developing countries but with relatively low productivity. This paper examines the causal impact of internet utilization, as a part of digitalization, on enterprise performance. We conducted a field survey among micro and small enterprises in Yogyakarta, the densest micro and small enterprise population province in Indonesia. The identification strategy exploits the fact that the differences in geographic topography produce conceivably exogenous variations in the strength of cellular signal that micro and small enterprises in various areas can receive to connect to the internet. We find that internet utilization has enabled micro and small enterprises to engage in the digital economy and has improved labor productivity and exports. |
| Keywords: | digital technology, internet, micro and small enterprises, productivity, exports |
| JEL: | H54 L53 L96 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2019-08&r=all |
| By: | Deasy Pane; Arianto A. Patunru |
| Abstract: | ‘Learning-by-exporting’ hypothesis suggests that once a firm enters a foreign market, its productivity will increase thanks to the exposure to new knowledge and experience abroad. We test this hypothesis using Indonesia’s firm level data from 2000 to 2012. The methodology involves scrutinizing the learning process of exporters by incorporating ‘export age’ – the number of years engaged in exporting activities – as an explanatory variable in the model. We find that exporter’s total factor productivity increases with export age, but not linearly. Furthermore, larger exporting firms and those in particular industries undergo a clearer learning process. However, even though export experience can boost productivity, it is only applicable for firms that have high productivity from the beginning, supporting the ‘self-selection’ hypothesis. |
| Keywords: | Indonesia, learning-by-exporting, Indonesia, export performance, productivity |
| JEL: | F12 F14 L23 L25 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2019-05&r=all |
| By: | Hart, Robert A. (University of Stirling) |
| Abstract: | This paper provides estimates of labor productivity for one-third of UK manufacturing during the Great Depression. It covers engineering and allied industries, and metal working industries. A unique data set of actual hours of work is combined with comparable real output and employment statistics. It establishes that output per worker-hour was countercyclical in the 1929-1932 peak-to-trough years of the Depression. This result has also been found for US manufacturing over the same period. Working time is found to play a crucial role the UK productivity response. Countercyclical productivity is discussed in terms of (i) the strong final output and consumer price deflations of 1929 to 1934, (ii) an absence of significant labor hoarding, and (c) diminishing returns to long weekly hours of work. |
| Keywords: | labor productivity, Great Depression, diminishing returns to hours |
| JEL: | O47 E32 N64 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12379&r=all |
| By: | Devilliers, Esther; Carpenter, Alain |
| Abstract: | Reducing the use of pesticides and more generally of chemical inputs is a topical issue for governments. Economists generally advocate taxation for reducing polluting input uses. While econometric models tend to show that the pesticides price elasticity is low, these models mostly consider short-term adjustments. Mid-term adjustments of variable input uses are expected to be larger as reducing such uses require farmers to change their cropping management practices (CMPs). CMP is a notion closely related to the economists' production functions and used by agricultural scientists for characterizing crop production technologies. Yet, data lacking on farmers' CMPs prevents direct empirical analyses of CMPs' performances and adoption processes. The main objective of this paper is to propose original approaches for identifying farmers' CMPs in farm accountancy panel datasets with cost accounting. We consider that each CMP is characterized by a specic production function and propose approaches for identifying farmers' CMPs and the related production functions either sequentially or simultaneously. We demonstrate the relevance of our approaches through an empirical application based on a French arable crop farm accountancy unbalanced panel dataset covering the 1998-2014 period. Albeit preliminary, our empirical results demonstrate that our approaches perform relatively well. Indeed, they enable us to identify two wheat CMPs used by farmers: a low input CMP and a high yielding CMP. |
| Keywords: | Crop Production/Industries, Farm Management |
| Date: | 2019–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc19:289655&r=all |