nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2020‒03‒16
twelve papers chosen by

  1. Estimating financing gaps in rice production in southwestern Nigeria: By Ojo, Temitope O.; Ogundeji, Abiodun A.; Babu, Suresh Chandra; Alimi, Taiwo
  2. Family Firms and Contractual Institutions By Iacovone,Leonardo; Maloney,William F.; Tsivanidis,Nick
  3. The Effects of Pollution and Business Environment on Firm Productivity in Africa By Soppelsa,Maria Edisa; Lozano Gracia,Nancy; Xu,L. Colin
  4. Does institutional quality contribute to increasing labour productivity in sub-Saharan Africa? An empirical analysis. By KPOGNON, Koffi; BAH, Mamadou
  5. Incentive Pay and Firm Productivity: Evidence from China By Jin, Zhangfeng; Pan, Shiyuan
  6. Subsidies and Agricultural Productivity: CAP payments and labour productivity (convergence) in EU agriculture By Maria Garrone; Dorien Emmers; Alessandro Olper; Jo Swinnen
  7. Agricultural Credits and Agricultural Productivity: Cross-Country Evidence By Seven, Unal; Tumen, Semih
  8. A Dynamic Analysis of Industrial Energy Efficiency and the Rebound Effect By Amjadi, Golnaz; Lundgren, Tommy; Zhou, Whenchao
  9. Education Spillovers in Farm Productivity : Revisiting the Evidence By Gille,Veronique
  10. The best versus the rest: divergence across firms during the global productivity slowdown By Criscuolo, Chiara; Andrews, Dan; Gal, Peter N.
  11. Corporate social responsibility and bank efficiency By Sanaa Belasri; Mathieu Gomes; Guillaume Pijourlet
  12. Firm Dynamics, Job Outcomes, and Productivity : South African Formal Businesses, 2010-14 By Aterido,Reyes; Hlatshwayo,Ayanda; Pieterse,Duncan; Steenkamp,Andre

  1. By: Ojo, Temitope O.; Ogundeji, Abiodun A.; Babu, Suresh Chandra; Alimi, Taiwo
    Abstract: This study analyzed the financing gaps relative to production frontier of rice farmers in Southwestern Nigeria. A multistage sampling technique was used to collect cross sectional data from 360 rice farmers selected from three States in the region. A Cobb-Douglas stochastic frontier and an adapted form of Harrod-Domar (HD) Growth model was employed to determine the financing gap required for the farmers to be at the frontier level. The empirical results of the frontier model show that quantity of labor, quantity of rice as planting material and herbicides were statistically significant in explaining the variations in the efficiency of rice production in Nigeria. However, age, gender, farming experience, household size, access to credit, access to information, adoption of improved variety and location of rice farmers as sources of technical inefficiencies. As revealed by the result of the HD growth model, the average amount of credit per season that farmers had access to was, ₦38,630.56 while the mean financing in the form of credit required to produce at the frontier level was ₦193,626.50, showing a financing shortfall of about 80%. As unravelled by the result of the study, it can thus be concluded that technical efficiency of rice farmers can be improved by improving access to timely credit and agricultural information for improving rice productivity. These findings suggest that filling the financing gap of smallholder rice farmers will improve rice productivity in Nigeria. The study, therefore, recommends that strengthening the existing technology by building farmers’ capacity on farm management practices would be surest means of improving rice productivity growth in Nigeria. This would not only contribute to the intensification of rice production in Nigeria to meet its increasing rice demand, but also improve rice farmers’ productivity and their households’ incomes.
    Keywords: NIGERIA, WEST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, financing, rice, crop production, labour, herbicides, seed quality, smallholders, farm income, stochastic models, agricultural production, technical efficiency, financing gaps, stochastic frontier, Harold-Domar Growth Model,
    Date: 2019
  2. By: Iacovone,Leonardo; Maloney,William F.; Tsivanidis,Nick
    Abstract: This paper offers new evidence on the relationship between contractual institutions, family management, and aggregate performance. The study creates a new firm-level database on management and ownership structures spanning 134 regions in 11 European countries. To guide the empirical analysis, it develops a model of industry equilibrium in which heterogeneous firms decide between family and professional management when the latter are subject to contracting frictions. The paper tests the model's predictions using regional variation in trust within countries. Consistent with the model, the finding show that there is sorting of firms across management modes, in which smaller firms and those in regions with worse contracting environments are more likely to be family managed. These firms are on average 25 percent less productive than professionally managed firms, and moving from the country with the least reliable contracting environment to the most increases total factor productivity by 21.6 percent. Family management rather than ownership drives these results.
    Date: 2019–04–03
  3. By: Soppelsa,Maria Edisa; Lozano Gracia,Nancy; Xu,L. Colin
    Abstract: This paper explores the links between city competitiveness and air pollution and the business environment. Because competitive cities not only attract more productive firms, but also facilitate their business, the paper look at firm performance as a proxy for city competitiveness. It focuses on African firms, because this region is developing fast and experiencing increasing pollution levels and the effects of agglomeration economies. The analysis finds two interesting results. First, the negative association between air pollution and firm performance can be seen at lower than expected levels of pollution. Second, the effects of capacity agglomeration on labor productivity growth are stronger compared to other regions. These findings suggest that cities in this region should address pollution issues soon, as they continue to grow fast and pollution levels are becoming an increasing concern.
    Date: 2019–04–30
  4. By: KPOGNON, Koffi; BAH, Mamadou
    Abstract: The objective of this work is to study the effect of institutional quality on labour productivity in sub-Saharan Africa. To do this, we considered a panel of 31 countries over the period from 1996 to 2016. Thus, we constructed an empirical model based on the stochastic frontier production function developed by Battese and Coelli (1995), to which we applied panel estimation techniques (static and dynamic), particularly with GMM system and Within estimators. Our results show that institutional quality indicators have a positive and significant influence on labour productivity. Political stability, government effectiveness and the rule of law are the indicators that contribute most to increasing labour productivity in sub-Saharan Africa. A series of robustness tests were performed to confirm our results. Thus, we suggest that African governments take a closer look at policies that promote good governance in their labour productivity growth strategies to improve the competitiveness of their economies.
    Keywords: Institutional quality, Labour productivity, GMM system, Sub-Saharan Africa
    JEL: C23 C26 J28 O43
    Date: 2019–03–13
  5. By: Jin, Zhangfeng; Pan, Shiyuan
    Abstract: This study examines the causes and consequences of incentive pay adoption among Chinese manufacturing firms. First, we find that a higher degree of labor scarcity encourages firms to adopt more incentive pay. Second, using an instrumental variables approach, we find that a 10 percentage point increase in the intensity of incentive pay results in 38% higher firm productivity. Third, the average productivity differences between SOEs and non-SOEs decrease by about 65% after controlling differences in incentive pay adoption. Therefore, facilitating incentive pay adoption among firms with better labor endowments (e.g. SOEs) increases productivity while reduces resource misallocation in developing countries.
    Keywords: Incentive Pay,Firm Productivity,Labor Scarcity,China,Instrumental Variables
    JEL: O14 O33 M52 J33 P31
    Date: 2020
  6. By: Maria Garrone; Dorien Emmers; Alessandro Olper; Jo Swinnen
    Abstract: This paper investigates the relationship between EU agricultural subsidies and agricultural labour productivity by estimating a conditional growth equation. We use more representative subsidy indicators and a wider coverage (panel data from 213 EU regions over the period 2004-2014) than have been used before. We find that, on average, CAP subsidies increase agricultural labour productivity, and the effect is almost entirely due to decoupled Pillar I payments. Coupled Pillar I payments have no impact. The impact of Pillar II is mixed.
    Date: 2018–12
  7. By: Seven, Unal (Central Bank of the Republic of Turkey); Tumen, Semih (TED University)
    Abstract: We present cross-country evidence suggesting that agricultural credits have a positive impact on agricultural productivity. In particular, we find that doubling agricultural credits generates around 4-5 percent increase in agricultural productivity. We use two different agricultural production measures: (i) the agricultural component of GDP and (ii) agricultural labor productivity. Employing a combination of panel-data and instrumental- variable methods, we show that agricultural credits operate mostly on the agricultural component of GDP in developing countries and agricultural labor productivity in developed countries. This suggests that the nature of the relationship between agricultural finance and agricultural output changes along the development path. We conjecture that development of the agricultural finance system generates entry into the agricultural labor market, which pushes up the agricultural component of GDP and keeps down agricultural labor productivity in developing countries; while, in developed countries, it leads to labor-augmenting increase in agricultural production. We argue that replacement of the informal credit channel with formal and advanced agricultural credit markets along the development path is the main force driving the labor market response.
    Keywords: agricultural credits, productivity, labor markets, financial development
    JEL: J43 Q14 Q18 O47
    Date: 2020–01
  8. By: Amjadi, Golnaz (CERE - the Center for Environmental and Resource Economics); Lundgren, Tommy (CERE - the Center for Environmental and Resource Economics); Zhou, Whenchao (CERE - the Center for Environmental and Resource Economics)
    Abstract: Energy efficiency improvement (EEI) is known as a cost-effective measure to meet energy, climate change and sustainable development targets. However, behavioral responses to such improvements referred to as energy rebound effect may change the emission and energy saving gains expected from EEI. Despite broad consensus around the existence of energy rebound effect, significant divergence exists on how to measure this effect, which matters in order to set up realistic energy and climate policies. In this study, we propose a new approach to measure the energy rebound effect in both the short and the long run using a two-stage procedure, applied to a firm-level data set from Swedish manufacturing industry over the period 1997–2008. In the first stage, we use data envelopment analysis (DEA) in order to obtain energy efficiency scores. In the second stage, we estimate energy rebound effect using dynamic panel data regression model. We show that in the short run, partial rebound effects exist within all manufacturing sectors, meaning that the rebound effect decreases, but does not totally offset, the potential energy and emission savings expected from EEI. In the long run, our results suggest that rebound effects decrease within most of the sectors.
    Keywords: Energy Efficiency Improvement; Rebound Effect; Data Envelopment Analysis
    JEL: D21 D22 Q41
    Date: 2020–03–02
  9. By: Gille,Veronique
    Abstract: This paper exploits the social organization of India to revisit the question of education spillovers in farm productivity. The fact that social interactions mainly occur within castes in rural India provides tools to show that the observed correlation between farm productivity and neighbors'education is likely to be a spillover effect. In particular, there are no cross-caste and no cross-occupation effects, which underlines that, under specific assumptions, which are stated and explored in the paper, the education of neighbors does not capture the effect of group unobservables. This evidence is complemented by separate estimations by crops, which show results that are consistent with education spillovers. The strategy used in this paper helps understand and interpret previous findings from the literature.
    Keywords: Educational Sciences,Food Security,Labor Markets,Crops and Crop Management Systems,Climate Change and Agriculture,Gender and Development
    Date: 2019–04–11
  10. By: Criscuolo, Chiara; Andrews, Dan; Gal, Peter N.
    Abstract: We document that labor productivity of the globally most productive firms – the “frontier” – has diverged from all other firms – the “rest” – throughout the 2000s. This divergence remains after controlling for capital intensity and markups, and is strongest in ICT services, indicative of “winnertakes-all” dynamics. We also find weakening catch-up and market selection below the frontier, which can explain why this divergence at the firm level is linked to weaker aggregate productivity. The divergence is found to be stronger in industries where product market regulations are less competition friendly, highlighting the need for regulatory policy to improve the contestability of markets.
    Keywords: firm dynamics; regulation; knowledge diffusion; technological change; productivity
    JEL: O30 O40 M13
    Date: 2019–08
  11. By: Sanaa Belasri (CleRMa - Clermont Recherche Management - Clermont Auvergne - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Mathieu Gomes (CleRMa - Clermont Recherche Management - Clermont Auvergne - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Guillaume Pijourlet (CleRMa - Clermont Recherche Management - Clermont Auvergne - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne)
    Abstract: Banks play a predominant role in the economy and are subject to growing expectations from stakeholders. It is therefore important to understand the financial impact of CSR on banks' activities. This article examines the impact of CSR on bank efficiency by using a DEA Dynamic Network Model. Based on an international sample of 184 banks in 41 countries over the 2009-2015 period, our empirical investigation reveals a positive impact of CSR on bank efficiency. We further show that this relationship is contingent upon the institutional context. Specifically, we find that CSR has a positive impact on bank efficiency only in developed countries, in countries where investor protection is high and in countries featuring a high degree of stakeholder orientation. We thus assert that some institutional characteristics must be present for the positive impact of CSR on bank efficiency to materialize.
    Keywords: Data envelopment analysis (DEA),Banking efficiency,Corporate social responsibility (CSR)
    Date: 2020
  12. By: Aterido,Reyes; Hlatshwayo,Ayanda; Pieterse,Duncan; Steenkamp,Andre
    Abstract: The formal private sector has a key role to play in fostering growth and reducing unemployment in South Africa?strengthening its performance is therefore critical. This paper looks at firm behaviour, firm entry and exit, job outcomes, and productivity dynamics using firm-level administrative data for South Africa. It is the first paper to benchmark employment and productivity dynamics against various comparator countries for which similar analysis has been undertaken. The paper finds that South Africa has an aged private sector with low firm dynamism and characterized by large firms that hold a large share of employment and revenue, although they are not as productive as micro firms and pay lower wages on average. The paper also finds that job creation is concentrated predominantly in incumbent firms, which are old and large, and job creation from entry and exit is negligible. The static and dynamic productivity decompositions raise a concern that although productive efficiency is gained, it is at least in part at the expense of labor. Large firms are not exploiting economies of scale, and particularly unproductive large firms may drive the weak performance of the private sector. Relatively high wages in South Africa could be partly explained by the inefficient use of labor and negative correlation between productivity and size. Likewise, these larger firms could be responsible for the negative direct impact on jobs of firms raising productivity.
    Date: 2019–03–21

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