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on Efficiency and Productivity |
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Issue of 2019‒11‒25
nine papers chosen by |
| By: | Førsund, Finn (Dept. of Economics, University of Oslo) |
| Abstract: | The generation of unintended residuals when producing intended outputs is the key factor behind our serious problems with pollution. The way this joint production is modelled is therefore of crucial importance for our understanding and empirical efforts to change economic activities in order to reduce harmful residuals. Estimation of efficiency and productivity when producing both intended and unintended outputs has emerged as an important research strand. The most popular models in the field are based on weak disposability between the two types of outputs and null jointness introduced by Shephard. The purpose of the paper is to show that these model types are seriously flawed. An alternative model based on the production theory of Frisch introduces technical jointness for the case when the unintended output is unavoidable. The materials balance based on physical laws tells us that when material inputs are used unintended outputs are unavoidable. The modelling of joint production must therefore reflect this. A key feature is that the two types of outputs should be separated using different production relations. This facilitates estimating two independent frontiers and calculating efficiency scores and Malmquist productivity changes for the two types using a non-parametric DEA model. |
| Keywords: | Intended and unintended outputs; joint production; Materials balance; Technical jointness; pollution; weak disposability |
| JEL: | C14 D24 D62 Q50 |
| Date: | 2019–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2019_009&r=all |
| By: | Natália P. Monteiro (NIPE and Department of Economics, University of Minho); Odd Rune Straume (NIPE and Department of Economics, University of Minho); Marieta Valente (NIPE and Department of Economics, University of Minho) |
| Abstract: | Whether or not the use of remote work increases firm labour productivity is theoretically ambiguous. We use a rich and representative sample of Portuguese firms, and within-firm variation in the policy on remote work, over the period 2011-2016, to empirically assess the causal productivity effect of remote work. Our findings from estimations of models with firm fixed effects suggest that the average productivity effect of allowing remote work is significantly negative, though relatively small in magnitude. However, we also find a substantial degree of heterogeneity across different categories of firms. In particular, we find evidence of opposite effects of remote work for firms that do not undertake R&D activities and for firms that do, where remote work has a significantly negative (positive) effect on labour productivity for the former (latter) type of firms. Negative effects of remote work are also more likely for small firms that do not export and employ a workforce with a below-average skill level. |
| Keywords: | Remote work; firm labour productivity; panel data |
| JEL: | D24 L23 M54 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:14/2019&r=all |
| By: | Massimo Filippini (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland and Universita della Svizzera Italiana (USI), Switzerland); Suchita Srinivasan (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland) |
| Abstract: | The health and safety of workers are important determinants of their productivity. In manufacturing industries, occupational health and safety (OHS) measures are critical workplace practices for employers to ensure better working conditions for employees, particularly in industries with rampant indoor pollution. This paper studies the impact of investments undertaken by small and medium enterprises in Vietnam in worker health and safety (including in air quality improvements, heat and noise protection as well as in lighting measures) on labor productivity using a production function approach and panel data from 2011-2015. We find that the amount invested by the firm per worker has a significant positive effect on labor productivity. Moreover, our results hold true for both small and large firms, and for firms belonging to different subgroups of industries. Given historically poor working conditions in Vietnam, policy implications relate to the importance of OHS measures and pollution abatement in influencing economic outcomes such as productivity. |
| Keywords: | Investments in health, Indoor pollution, Labor productivity, Small and medium enterprises, Vietnam |
| JEL: | D83 Q18 Q54 C23 C26 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:19-326&r=all |
| By: | Flynn, Zach |
| Abstract: | I propose a new decomposition of aggregate total factor productivity using a model where productivity is an index of unmeasured factors of production. The decomposition uses the conditional factor demand for the unmeasured factors. In this model, changes in the effective price of labor and capital can cause substitution to or from productivity. I study whether such changes explain the slowdown in US productivity growth from 2005 to 2016. I find that if not for the declining growth rate of the effective price of labor and capital encouraging substitution away from productivity, productivity growth would be accelerating. |
| Date: | 2019–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:sw42f&r=all |
| By: | Taghizadeh-Hesary, Farhad (Asian Development Bank Institute); Yoshino, Naoyuki (Asian Development Bank Institute); Kim, Chul Ju (Asian Development Bank Institute); Mortha, Aline (Asian Development Bank Institute) |
| Abstract: | State-owned enterprises (SOEs) play a key role in the economy of many countries. They are usually thought to be in charge of increasing social welfare. At the same time, their relatively low performance poses several problems, including slowing down economic growth, which is especially pronounced in countries where these firms represent a large share of the economy. Therefore, it is crucial for central governments to implement a comprehensive evaluation method to assess the performance of SOEs. By employing the principal component analysis technique and using data of 1,148 SOEs, mostly from European countries, we provide a more comprehensive framework for assessing SOE performance, which includes various factors: profitability, per capita productivity, per capita costs, debt due days, and solvency. The results of our empirical study show that solvency, per capita costs, and per employee productivity have more deterministic power over the success or failure of SOEs than profitability. Focusing on profitability as the sole assessment criterion will mislead policy makers, keeping in mind also that the nature of many SOEs is to generate social welfare and not profit. |
| Keywords: | state-owned enterprises; SOEs; performance assessment; public economics |
| JEL: | H11 L32 P11 |
| Date: | 2019–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0949&r=all |
| By: | Anneleen Vandeplas; Anna Thum-Thysen |
| Abstract: | This paper analyses different dimensions of skills mismatch (notably ‘macro-economic skills mismatch’, ‘skills shortages’, and ‘on-the-job skills mismatch’) and their empirical relationship with labour productivity. Macro-economic skills mismatch arises when the skills distribution differs between the available workers and those that get hired. Skills shortages occur when employers encounter difficulties to fill their vacancies. On-the-job skills mismatch (overqualification or underqualification) refers to a discrepancy between the qualification level of a jobholder and the requirements for that particular job. Our data suggest that certain types of skills mismatch are indeed on the rise in the EU, notably skills shortages and overqualification. Other types are on a long-term declining trend (e.g. underqualification) or follow more complex patterns over time (e.g. macro-economic skills mismatch). There are also significant differences across EU Member States in the levels of these indicators. We further suggest that theoretical predictions on the relationship between skills mismatch and productivity depend on the dimension of skills mismatch considered. Our empirical analysis suggests a negative relationship between macro-economic skill mismatch and labour productivity and – as a sign of a buoyant economy - a positive relationship between skills shortages and labour productivity. With regard to on-the-job skills mismatch, our data confirm earlier findings from the economic literature: when comparing a mismatched with a well-matched worker within the same occupation, overqualification raises and underqualification reduces productivity. When comparing a mismatched with a well-matched worker within the same qualification level, overqualification reduces and underqualification increases productivity. Our results imply a positive link between skills supply and productivity. However, to realise the full potential of higher skills, skills should be labour market relevant and skilled workers need to be matched with jobs that use these skills. Therefore, upskilling policies should ideally be accompanied by policies that assure quality and labour market relevance of acquired skills, policies that foster a general upgrading of jobs such as business regulations allowing for firm entry, growth, sectoral reallocation, and policies supporting labour mobility and innovation. |
| JEL: | D40 E31 L51 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:100&r=all |
| By: | Donald A R George; Eddi Fontanari; Ermanno Celeste Tortia |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:293&r=all |
| By: | Youngsheng Xu (Georgia State University); Naoki Yoshihara (School of Management, Kochi University of Technology) |
| Abstract: | In the presence of (at least locally) increasing returns to scale technologies, the paper asks the question: does there exist an economic system which implements Pareto ecient allocations and respects the voluntary participation principle? To answer this question, the paper formulates an economic system as an allocation rule under economies with non-convex production possibility sets, and proposes a few weaker axioms to represent the voluntary participation principle. Then, the paper shows that any Pareto ecient allocation rule satis es none of the axioms of the voluntary participation principle. The result suggests that pursuing Pareto eciency in the presence of increasing returns to scale technologies leads to a dictatorial allocation rule, or forces someone to participate in the economic system without any guarantee of a minimal living standard. |
| Keywords: | increasing returns to scale technologies, Pareto eciency, allocation rule, individual rationality, minimal autonomy |
| JEL: | D0 D2 D3 D5 D6 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2019-12&r=all |
| By: | Phi, Nguyet Thi Minh (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute); Tu, Chuc Anh (Asian Development Bank Institute); Yoshino, Naoyuki (Asian Development Bank Institute); Kim, Chul Ju (Asian Development Bank Institute) |
| Abstract: | We investigate empirically the relationship between ownership identity and the performance of firms in terms of profitability and solvency. Using cross-sectional data covering over 25,000 firms worldwide and by employing various empirical methods, we find robust support for the inferior performance of government enterprises over privately owned firms. Specifically, state-owned enterprises (SOEs) tend to be less profitable than privately owned enterprises. However, they appear to be more dependent on debt for their financial needs and are, thus, better leveraged. Additionally, SOEs are more labor intensive and have higher labor costs. Thus, evidence from this study could be interpreted to mean that privatization could improve the performance of public firms. However, a study over a longer period is needed before these results can be considered conclusive. |
| Keywords: | performance; ownership; solvency; state-owned enterprises; private-owned enterprises |
| JEL: | G32 G34 |
| Date: | 2019–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0950&r=all |