nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2020‒04‒06
twelve papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Choice of models for emission-generating technologies and designing technical efficiency improvements By Sushama Murty; Resham Nagpal
  2. Induced Innovation: Evidence from China's Secondary Industry By Fleisher, Belton M.; McGuire, William H.; Wang, Xiaojun; Zhao, Min Qiang
  3. A sectoral anatomy of the spanish productivity puzzle By Pilar Cuadrado; Enrique Moral-Benito; Irune Solera
  4. Productivity, Efficiency and Firm Size Distribution: Evidence from Vietnam By Hien Thu Pham; Nhan Buu Phan; Shino Takayama
  5. Efficiency of Universities and Research-Focused Institutions Worldwide: An Empirical DEA Investigation Based on Institutional Publication Numbers and Estimated Academic Staff Numbers By Lutz Bornmann; Sabine Gralka; Félix de Moya Anegón; Klaus Wohlrabe
  6. Quantifying Sunk Costs and Learning Effects in R&D Persistence By Juan A. Máñez Castillejo; James H. Love
  7. New Evidence on the Soft Budget Constraint: Chinese Envronmental Policy Effectiveness in Private versus SOEs By Mathilde Maurel; Thomas Pernet
  8. The agricultural treadmill -a way out through differentiation? An empirical analysis of organic farming and the agricultural treadmill By Henning Hansen
  9. Workforce composition, productivity and pay: the role of firms in wage inequality By Chiara Criscuolo; Alexander Hijzen; Cyrille Schwellnus; Erling Barth; Wen-Hao Chen; Richard Fabling; Priscilla Fialho; Balazs Stadler; Richard Upward; Wouter Zwysen; Katarzyna Grabska; Ryo Kambayashi; Timo Leidecker; Oskar Nordström Skans; Capucine Riom; Duncan Roth
  10. Immigration and Worker-Firm Matching By Gianluca Orefice; Giovanni Peri
  11. Determinants of Foreign Direct Investment and its Impact on Economic Performance in DRC By Dieumerci Zumbu; Claude Sumata
  12. Smart-Working: Work Flexibility without Constraints By Marta Angelici; Paola Profeta

  1. By: Sushama Murty (Jawaharlal Nehru University); Resham Nagpal (Jawaharlal Nehru University)
    Abstract: Theoretical and empirical comparisons of weak-disposability(WD), joint-disposability(JD), by-production(BP), and input(I)-based approaches to modelling emission-generating technologies are made. Under constant or non-increasing returns, BP-based model satisfies JD, but stands unique in the class of DEA technologies, where graph-based indexes of technical efficiency improvements (TEIs) are identical for WD, JD, and I-based approaches, which are nested. Multi-relations-based BP approach is more successful in capturing the true data-generating process, and TEIs in input-usage result in an intuitive trade-o? between optimal TEIs in good and bad output-production, not seen under other approaches. A table covering all configurations of optimal TEIs is derived for BP-approach and applied to study di?erences in optimal TEIs for non-performing production-units.
  2. By: Fleisher, Belton M. (Ohio State University); McGuire, William H. (University of Washington Tacoma); Wang, Xiaojun (University of Hawaii at Manoa); Zhao, Min Qiang (Xiamen University)
    Abstract: We investigate the effect of rising labor costs on induced technological change in China's secondary industry. While previous studies have focused primarily on induced technology change in agriculture and in energy production/environmental protection, there has been little evidence relating to China's adjustments as rising labor costs affect its global competitiveness in the manufacturing sector. Building on insights developed in a rich literature, we propose a model linking changes in labor productivity to changes in labor costs, and the availability of physical capital. Importantly, we derive testable hypotheses to distinguish induced innovation from standard substitution of capital for labor under fixed technology. These hypotheses are tested using both firm- and provincial-level data. Our empirical results support the hypothesis that rising wages have induced labor-saving innovation in China, at least in the decade of the 1990s, but less so or not at all after the middle of the next decade.
    Keywords: induced innovation, labor productivity growth, China
    JEL: O30 D22 D24 D33
    Date: 2020–03
  3. By: Pilar Cuadrado (Banco de España); Enrique Moral-Benito (Banco de España); Irune Solera (Banco de España)
    Abstract: Income per capita in Spain relative to that of other advanced EU countries held stable at around 90% from 2000 to 2016. Stagnant abour productivity is at the root of this lack of convergence. This paper examines these developments from a sectoral perspective based on recently released EU KLEMS data. Our main findings are as follows: i) Spain has lower productivity levels vis-à-vis other EU countries in most sectors, with only 4 out of 23 sectors exhibiting higher productivity in Spain: accommodation and food services, agriculture, electricity and gas supply, and information and communication services; moreover, the allocation of employment towards low-productivity sectors accounts for half of the aggregate Spain-EU productivity gap in levels; ii) turning to the changes in the 2000-2016 period, the overall lack of convergence is driven by a divergence in productivity relative to EU countries, especially within services sectors; iii) while both ICT (Information and Communication Technology) and non-ICT capital in Spain converged towards European levels, Total Factor Productivity (TFP) divergence in most sectors explains the lack of convergence in labour productivity. Finally, we explore one potential explanation for this pattern: the TFP divergence and ICT capital convergence can be rationalised in the presence of complementarities between ICT-capital and labour force skills. Indeed, our industry-country regression analysis suggests that the dismal performance of Spanish TFP might be related to the significant deficit in the population’s skills as proxied by PIAAC-OECD scores.
    Keywords: labour productivity, Total Factor Productivity, productivity gap, labour force skills.
    JEL: D24 C23
    Date: 2020–03
  4. By: Hien Thu Pham (CSIRO, QLD, Australia); Nhan Buu Phan (School of Economics, University of Queensland); Shino Takayama (School of Economics, University of Queensland)
    Abstract: By applying recently developed methodologies to Vietnamese data from 2000 to 2016, this paper studies production efficiencies and total factor productivity in manufacturing industries, using two separate empirical methodologies. The paper shows that middle-sized firms’ production efficiencies tend to be lower than those of small-sized or large-sized firms in most of the manufacturing industries, and that the middle-sized firms are quite diverse in terms of efficiencies. Further, we show that the level of productivity is also quite diverse across different firm sizes in most industries. Given these observations, we present a simple theoretical analysis to indicate how our empirical findings could affect a firm’s decision in expanding business size. Over the past few decades, the Vietnamese government has conducted policies to promote small-sized and middlesized firms. Our findings indicate the importance of adopting policies that reduce the uncertainty that those firms may possibly face, such as financial support.
    Date: 2020–03–26
  5. By: Lutz Bornmann; Sabine Gralka; Félix de Moya Anegón; Klaus Wohlrabe
    Abstract: One of the core indicators in the field of scientometrics is the number of papers published by a unit within a given period. However, such indicators can only be assessed properly by considering the unit’s available resources. When evaluating the efficiency of institutions worldwide, the problem concerning the availability of internationally standardized data arises. While on the output side consistent publication indicators are available, these data are frequently not available on the input side. We therefore introduce a new input indicator based on the authors’ mentions in the institutions’ papers. We calculate efficiency scores for more than 4,800 universities and other research-focused institutions worldwide. “Harvard University” is the best performing institution (in all years) followed by many other institutions from Northern America or Europe. The results of the study show that institutions in the Pacific region have the highest average efficiency scores, followed by Northern America and Western Europe. While many results of this study are scarcely surprising, it is the first time that an efficiency analysis is being performed for a multitude of institutions worldwide using a standardized input indicator. It seems that the new proxy indicator based on co-authors is suitable for reflecting institutional staff numbers.
    Keywords: bibliometrics, efficiency, data envelopment analysis, universities, research-focused institutions, world
    JEL: I21 I23 D61 H52
    Date: 2020
  6. By: Juan A. Máñez Castillejo (University of Valencia and ERICES); James H. Love (Unviersity of Leeds)
    Abstract: This paper analyzes and quantifies the fundamental factors that are likely to cause persistence in performing R&D activities: the existence of sunk costs associated with R&D activities and the process of learning that characterizes this type of activity. We estimate our model with Spanish manufacturing firms for the period 1991-2014. By decomposing the effects of sunk costs and learning effects, we find that both are important determinants of R&D persistence, and that failing to allow for learning systematically overestimates sunk cost effects. Both large firms and SMEs benefit from direct and indirect (via productivity) effects of R&D experience, but in large firms this is more likely to be manifest through productivity improvements while in smaller firms the effect is more skewed towards a direct effect on R&D likelihood. Further, our results suggest that whereas the impact of sunk costs in R&D persistence is greater for large firms than for SMEs, the scope for direct learning from continuous R&D engagement is greater for SMEs than for larger firms.
    Keywords: R&D persistence, sunk costs; learning effects
    JEL: O32 L60
    Date: 2019–12
  7. By: Mathilde Maurel (CNRS - Centre d'Economie de la Sorbonne - Université Paris 1 panthéon-Sorbonne;; Thomas Pernet (Centre d'Economie de la Sorbonne;
    Abstract: This paper analyses the efficiency of a set of environmental measures introduced by the 11th FYP (Five Years Plan) in China 2006, using a rich and unique dataset borrowed from the Ministry of Environmental Protection (MEP) and from the State Environmental Protection Agency (SEPA). The objective is to provide new evidence of the Soft Budget Constraint (SBC), which is a key concept coinced by Janos Kornai. The main finding is that TCZ (Two Control Zone) cities are successful in bringing down the emission of SO2, and more importantly that this success is driven by the private sector. Sectors dominated by State-Owned Enterprises (SOEs) are less sensitive to the environmental target-based evaluation system, by a factor of 42%. We also find that one channel, through which this adjustment takes place, is Total Factor Productivity (TFP), but not in the case of SOEs. We interpret these results as pointing to the evidence of a still ongoing SBC surrounding Chinese SOEs
    Keywords: Environmental regulation; China; Kornai; Soft Budget Constraint
    JEL: Q53 Q56 P2 R11
    Date: 2020–02
  8. By: Henning Hansen (KU - University of Copenhagen = Københavns Universitet)
    Abstract: The agricultural treadmill describes how technological advances create productivity gains for the benefit of progressive farmers, but where the result is also increased supply, falling prices, economic problems for laggard farmers and thus the need for new achievements in technology. In order to escape from this treadmill, farmers are trying to differentiate and diversify into new more attractive segments. Agro-tourism and organic agriculture are examples of differentiation. The elements and processes in the treadmill are described and supported by empirical time series. Possibilities of delaying or stopping the treadmill are discussed. The question is raised whether organic farming is able to escape the treadmill. The question is answered from both a theoretical and an empirical point of view. The empirical analysis is based on examples from Danish agriculture, which has a significant organic agricultural production. The conclusion is, that the structural and productivity developments and the price trends-which are important elements in the treadmill-are almost identical in the organic and conventional agriculture.
    Keywords: Treadmill,organic agriculture,differentiation,productivity,Blue Ocean
    Date: 2020–11–30
  9. By: Chiara Criscuolo; Alexander Hijzen; Cyrille Schwellnus; Erling Barth; Wen-Hao Chen; Richard Fabling; Priscilla Fialho; Balazs Stadler; Richard Upward; Wouter Zwysen; Katarzyna Grabska; Ryo Kambayashi; Timo Leidecker; Oskar Nordström Skans; Capucine Riom; Duncan Roth
    Abstract: In many OECD countries, low productivity growth has coincided with rising inequality. Widening wage and productivity gaps between firms may have contributed to both developments. This paper uses a new harmonised cross-country linked employer-employee dataset for 14 OECD countries to analyse the role of firms in wage inequality. The main finding is that, on average across countries, changes in the dispersion of average wages between firms explain about half of the changes in overall wage inequality. Two thirds of these changes in between-firm wage inequality are accounted for by changes in productivity-related premia that firms pay their workers above common market wages. The remaining third can be attributed to changes in workforce composition, including the sorting of high-skilled workers into high-paying firms.
    Keywords: firm wage premium, productivity, wage inequality
    JEL: D2 J31 J38
    Date: 2020–03–24
  10. By: Gianluca Orefice; Giovanni Peri
    Abstract: The process of matching between firms and workers is an important mechanism in determining the distribution of wages. In a labor market characterised by large dispersion of workers' productivity and worker-firm complementarity, high quality firms have strong incentives to screen for the quality of workers. This process will increase the positive quality association of firm-worker matches known as positive assortative matching (PAM). Immigration in a local labor market, by increasing the variance of workers abilities, may drive stronger PAM between firms and workers. Using French matched employer-employee (DADS) data over the period 1995-2005 we document that positive supply-driven changes of immigrant workers in a district increased the strength of PAM. We then show that this association is consistent with causality, is quantitatively significant, and is associated with higher average productivity and firm profits, but also with higher wage dispersion. We also show that the increased degree of positive assortative matching is mainly reached by high-productive firms "losing" lower quality workers and "attracting" higher quality workers.
    Keywords: Matching;Workers;Firms;Immigration;Productivity
    JEL: F16 J20 J61
    Date: 2020–04
  11. By: Dieumerci Zumbu (Université protestante au Congo - Université protestante au Congo); Claude Sumata (Université protestante au Congo - Université protestante au Congo)
    Date: 2020
  12. By: Marta Angelici; Paola Profeta
    Abstract: Does removing the constraints of time and place of work increase the utility of workers and firms? We design a randomized experiment on a sample of workers in a large Italian company: workers are randomly divided into a treated group that engages in flexible space and time job (which we call “smart-working”) one day per week for 9 months and a control group that continues to work traditionally. By comparing the treated and control workers, we find causal evidence that the flexibility of smart-working increases the productivity of workers and improves their well-being and work-life balance. We also observe that the effects are stronger for women and that there are no significant spillover effects within workers of a team.
    Keywords: randomized control trial, productivity, work-life balance, well-being
    JEL: J16 J22 J24 L20 M54
    Date: 2020

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