nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2020‒03‒09
fourteen papers chosen by

  1. Entry, Exit and Productivity: Evidence from French Manufacturing Firms. By Enrico De Monte
  2. Measuring Productivity: theory and British practice By Nicholas Oulton
  3. Salary cap and National Basketball Association teams' productive performance. A two stage Data Envelopment Analysis approach under a metatechnology framework By Nikolaos, Chatzistamoulou; Theodoros, Antonakis; Konstantinos, Kounetas
  4. Industry evidence and the vanishing cyclicality of labor productivity. By Zuzana Molnarova
  5. Productivity of the English National Health Service: 2017/18 update By Adriana Castelli; Martin Chalkley; James Gaughan; Idaira Rodriguez Santana
  7. The intellectual spoils of war? Defense R&D, productivity and international spillovers By Van Reenen, John; Moretti, Enrico; Steinwender, Claudia
  8. The Next Frontier in Water Supply Service Delivery : An Assessment of the Performance of Water Sector Service Providers in Pourashavas in Bangladesh By Bahuguna,Aroha; Andres,Luis Alberto; Joseph,George; Huq,Mainul
  9. Trade liberalization, input intermediaries and firm productivity: evidence from China By Defever, Fabrice; Imbruno, Michele; Kneller, Richard
  10. Weather shocks, credit and production efficiency of rice farmers in Vietnam By Thanh-Tung Nguyen; Trung Thanh Nguyen; Ulrike Grote
  11. Short-term Impacts of the GDPR on Firm Performance By Koski, Heli; Valmari, Nelli
  13. Innovation Patterns and Their Effects on Firm-Level Productivity in South Asia By Cirera,Xavier; Cusolito,Ana Paula
  14. Corruption, Regulatory Burden and Firm Productivity By Amin,Mohammad; Ulku,Hulya

  1. By: Enrico De Monte
    Abstract: This paper analyzes productivity dynamics based on French firm-level data covering nine key 2-digit industries for the period 1994 - 2016. I estimate firm-level productivity through the estimation of a translog production function and investigate the following main aspects: (i) aggregate productivity change with firm entry and exit by applying the Dynamic OlleyPakes Productivity Decomposition (DOPD), (ii) firms’ ability to improve productivity and productivity persistence, and (iii) productivity differences between different firm groups such as survivors, entrants and exitors as well as small, medium and big firms by applying the concept of stochastical dominance. My results show that aggregate productivity has increased for most the considered 2-digit industries and that in many cases surviving firms’ have contributed significantly to these positive improvements. Entering firms contribute in many cases positively to aggregate productivity while the contribution of exitors shows varying signs. Furthermore, I find that firms’ reveal a high degree of productivity persistence. Analysing productivity difference between firm groups the results suggest that the productivity distribution of surviving firms stochastically dominates the distribution of entering and exiting firms. Surprisingly, the results reveal that big firms do not stochastically dominate the productivity distribution of small firms.
    Keywords: production function estimation, productivity decomposition, technological change, productivity differences, firm entry and exit.
    JEL: C13 C14 D24 D30 L60 O47
    Date: 2020
  2. By: Nicholas Oulton (Centre For Macroeconomics; London School of Economics; NIESR; ESCoE)
    Abstract: This paper lays out the basic theory behind productivity measurement, whether at the level of the country, region, industry or firm. The theory is illustrated using recent data from UK official publications. Productivity growth over time and differences in productivity levels between countries or regions at a point in time are both covered. Labour productivity and multi-factor productivity (MFP) are discussed. In the case of MFP special attention is paid to the measurement of capital inputs. Wherever possible, an accompanying spreadsheet supplies data from recent publications by the United Kingdom’s Office for National Statistics so that readers can reproduce official estimates or even employ alternative assumptions to produce their own estimates. Limitations in the underlying theory are highlighted as are empirical difficulties in implementing the theory.
    Date: 2020–01
  3. By: Nikolaos, Chatzistamoulou; Theodoros, Antonakis; Konstantinos, Kounetas
    Abstract: This paper evaluates NBA team's productive performance using a two-stage approach under a metafrontier framework. The proposed approach decomposes overall efficiency into salary-cap and on-court efficiency while a structure type of heterogeneity arises in the context of East and West conferences. The inclusion of salary cap, an important contributing element, as an input allow us to examine its effect on different types of efficiency. The empirical results show that NBA teams present a diachronically performance in terms of overall, on court and salary cap efficiency. Moreover, technology gaps reduce over time while a beta and sigma convergence examination reveal a path of convergence. Finally, a catch-up index denotes a speed of convergence especially after the salary cap implementation.
    Keywords: Salary cap, National basketball association, two-stage production process, Metatechnology production function
    JEL: C44 D24 Z0
    Date: 2020–02–06
  4. By: Zuzana Molnarova
    Abstract: : Aggregate labor productivity used to be strongly procyclical in the United States, but the procyclicality has largely disappeared since the mid-1980s. This paper explores the industry-level evidence in order to discriminate between existing explanations of the vanishing procyclicality of the labor productivity. I document the change in the cyclical properties of productivity in the U.S. using industry-level data and focus on a particularly puzzling feature, namely that the correlations of the industry productivity with industry output and labor input remained on average much more stable before and after the mid-1980s compared to the aggregate correlations. In other words, there is little evidence for the vanishing cyclicality of labor productivity at the industry level. I construct a simple industry-level RBC model that nests two leading explanations of the vanishing cyclicality of productivity that have been proposed in the literature. I show that the two explanations have qualitatively di?erent predictions for the cyclical properties of industry-level variables. The mechanism based on a structural change in the composition of aggregate shocks is able to replicate the stability of industry-level moments across time. In contrast, the mechanism based on increased labor market ?exibility is less successful in matching the industry-level evidence.
    JEL: E32 E24 E37
    Date: 2020–01
  5. By: Adriana Castelli (Centre for Health Economics, University of York, York, UK); Martin Chalkley (Centre for Health Economics, University of York, York, UK); James Gaughan (Centre for Health Economics, University of York, York, UK); Idaira Rodriguez Santana (Centre for Health Economics, University of York, York, UK)
    Abstract: This report updates the Centre for Health Economics’ time-series of National Health Service (NHS) productivity growth for the period 2016/17 to 2017/18. NHS productivity growth is measured by comparing the growth in outputs produced by the NHS to the growth in inputs used to produce them. NHS outputs include all the activities undertaken for NHS patients wherever they are treated in England. It also accounts for changes in the quality of care provided to those patients. NHS inputs include the number of doctors, nurses and support staff providing care, the equipment and clinical supplies used, and the facilities of hospitals and other premises where care is provided.
    Date: 2020–02
  6. By: Obed, Muhindo
    Keywords: Livestock Production/Industries, Productivity Analysis
    Date: 2018–11
  7. By: Van Reenen, John; Moretti, Enrico; Steinwender, Claudia
    Abstract: In the US and many other OECD countries, expenditures for defense-related R&D represent a key policy channel through which governments shape innovation, and dwarf all other public subsidies for innovation. We examine the impact of government funding for R&D - and defense-related R&D in particular - on privately conducted R&D, and its ultimate effect on productivity growth. We estimate models that relate privately funded R&D to lagged government-funded R&D using industry-country level data from OECD countries and firm level data from France. To deal with the potentially endogenous allocation of government R&D funds we use changes in predicted defense R&D as an instrumental variable. In both datasets, we uncover evidence of “crowding in” rather than “crowding out,” as increases in government-funded R&D for an industry or a firm result in significant increases in private sector R&D in that industry or firm. A 10% increase in government-financed R&D generates 4.3% additional privately funded R&D. An analysis of wages and employment suggests that the increase in private R&D expenditure reflects actual increases in R&D employment, not just higher labor costs. Our estimates imply that some of the existing cross-country differences in private R&D investment are due to cross-country differences in defense R&D expenditures. We also find evidence of international spillovers, as increases in government-funded R&D in a particular industry and country raise private R&D in the same industry in other countries. Finally, we find that increases in private R&D induced by increases in defense R&D result in significant productivity gains.
    Keywords: defense; R&D; productivity
    JEL: R14 J01 J1
    Date: 2019–11
  8. By: Bahuguna,Aroha; Andres,Luis Alberto; Joseph,George; Huq,Mainul
    Abstract: Using data from the International Benchmarking Network for Water and Sanitation Utilities, this paper on the water sector in pourashavas (municipalities) in Bangladesh provides an analysis of the trends in the water sector development over 2010?16. The main purpose of the paper is to examine the average performance of the water sector providers in the pourashavas to encourage conversation on identifying and addressing deficiencies in service performance in comparison with that in the rest of Bangladesh and the world. This analysis finds that although pourashavas perform on the lower end of the spectrum compared with the rest of Bangladesh on many indicators, the top 20 percent of the pourashavas are globally competitive on indicators of staff productivity, cost coverage, and daily per capita consumption of water.
    Keywords: Hydrology,Labor Markets,Inequality,Small Private Water Supply Providers,Water and Human Health,Water Supply and Sanitation Economics,Town Water Supply and Sanitation
    Date: 2019–06–27
  9. By: Defever, Fabrice; Imbruno, Michele; Kneller, Richard
    Abstract: We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effects of input tariff cuts on firms that do not directly import therefore depends on the extent that wholesalers are a feature of input supply within an industry. Using firm level data from China, we document that wholesalers play no such role for direct importers. However, other firms experience productivity gains from reducing input tariffs if trade intermediation of foreign inputs within their sector is high. They suffer efficiency losses otherwise.
    Keywords: firm heterogeneity; trade liberalization; intermediate inputs; productivity; intermediaries; China
    JEL: F12 F13
    Date: 2019–12
  10. By: Thanh-Tung Nguyen; Trung Thanh Nguyen; Ulrike Grote
    Abstract: Enhancement of rice production efficiency in developing countries is important to improve the livelihoods of farmers and to ensure global food security for a growing population. Despite significant progress in recent decades, rice production in these countries is facing multiple challenges from climate change, land degradation, to the increasing competition for land and labour from urbanization and industrialization. Given that rice farmers in Vietnam often suffer from extreme weather events and lack of access to credit, our study aims to (i) investigate the impact of weather shocks and credit on the rice production efficiency, and to (ii) examine the role of credit in mitigating the impact of weather shocks. We find that weather shocks, land fragmentation and the migration of household members are the major sources of inefficiency. Meanwhile, livestock, farm mechanization and education level are positive factors for rice production efficiency. In addition, our results show that access to credit plays a significant role in mitigating the negative impact of weather shocks. Our studies call for more assistance and support to farmers in mitigating the severe effect of weather shocks, in particular, via the promotion of credit market. In addition, the encouragement of farm mechanization, land defragmentation, livestock farming and the improvement of rural education should be given a high priority to improve the rice production efficiency.
    Keywords: Weather shocks, Agricultural production efficiency, Credit
    JEL: Q12 Q54
    Date: 2020–02
  11. By: Koski, Heli; Valmari, Nelli
    Abstract: Abstract This paper uses extensive firm-level data on European and US companies from 2014–2018 to explore the short-term impacts of the General Data Protection Regulation (GDPR) on European companies’ financial performance. Our empirical analysis suggests that the costs of the GDPR during the first year of its implementation were substantial, at least for some European companies. The profit margins of the data-intensive firms increased, on average, by approximately 1.7 to 3.4 percentage points less than the profit margins of their US counterparts. The European data-intensive SMEs were the most disadvantaged group regarding their post-GDPR profit developments, while the large European data-intensive companies’ short-term post-GDPR profit margins dropped relatively less. We do not find any statistically significant difference in the profit margin developments of the very large European and US companies. This finding is consistent with the view that the very large, multinational US companies that often have European customers and deal with the personal data of EU citizens also faced substantial costs when they needed to comply with the GDPR.
    Keywords: Regulation, GDPR, Compliance costs, Firm profitability
    JEL: K2 L2 L5
    Date: 2020–02–25
  12. By: Hlanze, Mbali Phile
    Keywords: Environmental Economics and Policy
    Date: 2018–04
  13. By: Cirera,Xavier; Cusolito,Ana Paula
    Abstract: This paper describes and benchmarks innovation activities for a sample of countries in the South Asia region, as well as the impact of these activities on firm-level productivity. The evidence gathered suggests that countries in the South Asia region can be divided into two groups, in terms of the magnitude and composition of the innovation activities: leaders (Bangladesh and India) and laggards (Nepal and Pakistan). Leaders present higher rates of innovation activities than laggards and focus more on process innovation than product innovation. Differences across firms within all countries tend to present similar patterns when considering leaders and laggards, with the acquisition of knowledge capital (for example, research and development investments in equipment, and training) highly concentrated in a few firms, and mature, exporter, and foreign-owned firms as the most innovative of the region. The evidence also suggests a positive impact of innovation on productivity, primarily via incremental innovation, especially in India.
    Keywords: Legislation,Real&Intellectual Property Law,Social Policy,Intellectual Property Rights,Legal Products,Common Property Resource Development,Legal Reform,Regulatory Regimes,Judicial System Reform,Inequality,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,Food&Beverage Industry,Common Carriers Industry,Plastics&Rubber Industry,General Manufacturing,Construction Industry,Business Cycles and Stabilization Policies,Innovation,International Trade and Trade Rules
    Date: 2019–06–10
  14. By: Amin,Mohammad; Ulku,Hulya
    Abstract: Using firm-level data from more than 39,000 firms in 111 economies, this paper tests the hypothesis that corruption impedes productivity more at higher levels of regulation. The analysis finds that there is a significant negative relationship between corruption and firm productivity when regulation is high and an insignificant relationship when it is low. These findings are robust to different controls and specifications.
    Keywords: Economic Adjustment and Lending,Public Finance Decentralization and Poverty Reduction,Macro-Fiscal Policy,Taxation&Subsidies,Public Sector Economics,Crime and Society,Gender and Development,Access to Finance
    Date: 2019–06–25

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