nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2019‒07‒15
nine papers chosen by

  1. Employee wellbeing: the impact on productivity and firm performance By Jan-Emmanuel De Neve; Christian Krekel; George Ward
  2. The Real Exchange Rate, Innovation and Productivity: Regional Heterogeneity, Asymmetries and Hysteresis By Laura Alfaro; Alejandro Cunat; Harald Fadinger; Yanping Liu
  3. The Role of Nonemployers in Business Dynamism and Aggregate Productivity By Pedro Bento; Diego Restuccia
  4. India’s Agrarian Performance: A Comparative Analysis of UPA and NDA Regimes By Sthanu R. Nair
  5. Public sector productivity: measurement challenges, performance information and prospects for improvement By Dunleavy, Patrick
  6. Bigger, Not Cleaner! Another Look at the Trade-Environment By Evangelina Dardati; Meryem Saygili
  7. Corporate Social Responsibility and Firm Performance: Indian Evidence By Sudershan Kuntluru
  8. Firm size, productivity and pay in today's service economy By Giuseppe Berlingieri; Sara Calligaris; Chiara Criscuolo
  9. Improved productivity measurement in New Zealand's Longitudinal Business Database By Fabling, Richard; Mare, David C.

  1. By: Jan-Emmanuel De Neve; Christian Krekel; George Ward
    Abstract: Does having happier staff mean higher productivity and improvements in companies' bottom line? A study of over 1.8 million employees across 73 countries by Christian Krekel, George Ward and Jan-Emmanuel De Neve detects a strong positive correlation between employee wellbeing, productivity and firm performance.
    Keywords: employee satisfaction, engagement, employee productivity, firm performance, wellbeing, meta-analysis
    JEL: I31 J24
    Date: 2019–07
  2. By: Laura Alfaro; Alejandro Cunat; Harald Fadinger; Yanping Liu
    Abstract: We evaluate manufacturing firms’ responses to changes in the real exchange rate (RER) using detailed firm-level data for a large set of countries for the period 2001-2010. We uncover the following stylized facts: In export-oriented emerging Asia, real depreciations are associated with faster growth of firm-level productivity, higher sales and cash-flow, and higher probabilities to engage in R&D and export. We find negative effects for firms in other emerging economies, which are relatively more import dependent, and no significant effects for firms in industrialized economies. Motivated by these facts, we build a dynamic model in which real depreciations raise the cost of importing intermediates, affect demand, borrowing constraints and the profitability of engaging in innovation (R&D).We decompose the effects of RER changes on productivity growth across regions into these channels. We estimate the model and quantitatively evaluate the different mechanisms by providing counterfactual simulations of temporary RER movements and conduct several robustness analyses. Effects on physical TFP growth, while different across regions, are non-linear and asymmetric.
    Keywords: real exchange rate, innovation, productivity, exporting, importing, financial constraints, firm-level data
    JEL: F O
    Date: 2019–05
  3. By: Pedro Bento; Diego Restuccia
    Abstract: A well-documented observation of the U.S. economy in the last few decades has been the steady decline in the net entry rate of employer firms, a decline in business dynamism, suggesting a possible connection with the recent slowdown in aggregate productivity growth. We consider the role of nonemployers, businesses without paid employees, in business dynamism and aggregate productivity. Notwithstanding the decline in the growth of employer firms, we show that the total number of firms, which includes nonemployer businesses, has increased in the U.S. economy since the early 1980s. We interpret this trend, along with the evolution of the employment distribution across firms, through the lens of a standard theory of firm dynamics. The model implies that firm dynamics have contributed to an average annual growth rate of aggregate productivity of at least 0.26% since the early 1980s, over one quarter of the productivity growth of 1% in the data. Further, our implied measure of productivity growth moves closely over time with measured productivity growth in the data.
    JEL: E02 E1 O1 O4 O51
    Date: 2019–06
  4. By: Sthanu R. Nair (Indian Institute of Management Kozhikode)
    Abstract: The performance of India’s agrarian economy under the National Democratic Alliance (NDA)-II government has been a subject of intense public debate in the last few years.Yet, a detailed study on the subject is not available. The objective of this article is to examine the overall performance of the Indian agriculture sector during the NDA-II regime compared to the United Progressive Alliance (UPA) regime. It is found that, contrary to popular perception, the Indian agriculture sector performed pretty well during the NDA-II regime. Despite the poor climatic conditions, the growth of agricultural gross value added was equivalent to the targeted long-term growth rate of 4 percentin the NDA-II regime.The growth of production of food commodities such as cereals, pulses, oilseeds, tea, milk, egg,and fish was higher in the NDA-II regime compared to the whole UPA regime.In contrast, production of sugarcane, cotton, coffee, vegetables, fruits,and meat grew at a lower rate during the NDA-II regime.Importantly, there are clear signs of diversification of food production towards high-value agricultural commodities during the NDA-II regime.There was an improvement in the productivity of cereals,pulses, oilseeds, tea,and sugarcane.The MSP of the majority of the farm products grew at a lower rate during the NDA-II regime compared to the UPA regime.Though this might have hurt the farmers and has triggered farmers’agitation, it helped to reduce the food price inflation to a significant extent compared to the UPA regime. The efficiency of agricultural credit in promoting agricultural growth has come down significantly over the yearsincluding the NDA-II regime.Thisimplies that agricultural growth during the NDA-II regime was driven by other factors, and they include higher productivity growth; improvement in the road network; increase in agricultural exports; higher overall budgetary expenditure on agriculture and allied activities, particularly by the state governmentsand targeting of fertiliser subsidy.It seems the lower growth of MSP and agricultural credit during the NDA-II regime was compensated by these other supportive measures.
    Keywords: Agriculture, Comparative analysis, NDA, UPA
    Date: 2019–04
  5. By: Dunleavy, Patrick
    Abstract: Improving productivity at the organisational level offers the greatest immediate dividends and could successfully cover the largest departments and agencies at the central or national level. For many decades the measurement of government outputs in national statistics and economic accounts used inputs, which assumes that government productivity neither grows nor falls. Modern solutions exist however, that can generate empirically useful metrics of total outputs from which stakeholders could learn key lessons about the productivity of their agencies over time. This article outlines the tools needed to apply these modern solutions and offers recommendations for improving cross-national productivity data for government
    Keywords: Productivity measurement; core inputs; quality weighting; labour; regression analysis
    JEL: H10 H11 H30
    Date: 2017–12–20
  6. By: Evangelina Dardati (Economics Department, Universidad Alberto Hurtado); Meryem Saygili (Department of Social Sciences, The University of Texas at Tyler)
    Abstract: In this paper, we use microdata from Chile to examine the relationship between export status and the environmental performance of firms. We proxy environmental performance by measures of emission intensity. We find that the correlation between export status and emission intensity depends on how the latter is measured. In particular, we find that export status is negatively correlated with emission intensity when we define emission intensity as emissions over sales, but it is uncorrelated when we use value added instead of sales. The difference between those two variables is that value added excludes the value of materials that the firm gets from other sources (outsourcing). Those intermediate inputs entail emissions that do not belong to the firm. Our data show that outsourcing is positively correlated with export status. Thus, using sales as an output measure overestimates firm activity, and, hence, exporters look cleaner than they actually are. We show, more formally, why the distinction between sales and value added is important, using a simple firm-level emission decomposition.
    Keywords: Emission intensity, export status, foreign ownership, productivity, outsourcing.
    Date: 2019–04
  7. By: Sudershan Kuntluru (Indian Institute of Management, Kozhikode)
    Abstract: With effect from 1 April 2014, India’s new Companies Act 2013 makes it mandatory for certain firms to spend a certain minimum amount on Corporate Social Responsibility (CSR) activities. In this study, the impact of mandatory CSR spending on firm performance is examined based on the data for 1460 firm years for the period 2015 to 2018. It is hypothesized that CSR spending has a positive impact on firm performance measured in terms of ROA and ROE. Logit and Probit models are used to estimate the impact of CSR on performance of firms. Contrary to the expectations, the empirical results show that CSR spending has negative impact on performance (ROA/ROE) subsequent to the CSR spending made mandatory in India. It implies that the mandatory CSR spending targets are at the expense of shareholders returns. The findings are useful to regulators, managers and investors.
    Keywords: Firm performance, Corporate Social Responsibility; Mandatory CSR, India
    Date: 2019–03
  8. By: Giuseppe Berlingieri; Sara Calligaris; Chiara Criscuolo
    Abstract: The evidence that bigger firms pay higher wages and have higher productivity is based mainly on manufacturing, which is only a small share of today's economy. Giuseppe Berlingieri, Sara Calligaris and Chiara Criscuolo reveal that while the size premia for both wages and productivity are significantly weaker in market services than in manufacturing, the link between wages and productivity is stronger.
    Keywords: productivity, size-premium, wages
    JEL: E2 D2 J3
    Date: 2019–07
  9. By: Fabling, Richard; Mare, David C.
    Abstract: Accounts information that businesses supply to Inland Revenue for tax purposes provide over 96% of the observations in the productivity dataset in the Longitudinal Business Database. In 2013, material changes in the data collected halted the annual updating of the productivity dataset. This paper describes a method for accounting for these raw data discontinuities, and revisits the prior productivity dataset methodology, implementing wholesale changes that improve the overall quality of the data and the versatility of the productivity dataset.
    Keywords: Productivity Analysis
    Date: 2019–04

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