nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2020‒11‒02
ten papers chosen by

  1. Determinants of Financial Performance of Microfinance Banks in Kenya By King'ori S. Ngumo; Kioko W. Collins; Shikumo H. David
  2. Measusing productivity growth By Richard S.J. Tol
  3. Human Capital Development By Mark Mitchell; Marta Favara; Catherine Porter; Alan Sánchez
  4. Robot adoption at German plants By Deng, Liuchun; Plümpe, Verena; Stegmaier, Jens
  5. Growth factors in developed countries: A 1960-2019 growth accounting decomposition By Gilbert Cette; Aurélien Devillard; Vincenzo Spiezia
  6. Electricity Sector Reform Performance in Sub-Saharan Africa: A Parametric Distance Function Approach By Asantewaa, Adwoa; Jamasb, Tooraj; Llorca, Manuel
  7. Services imports and labour in Viet Nam By Alexander Jaax; Louise Johannesson; Thi Xuan Thu Nguyen
  8. Influence of institutional factors on the performance of the agricultural sector in Mozambique By João Z. Carrilho; Rui N. Ribeiro
  9. Efficiency of public spending on primary education in developing countries: the case of resource-rich countries. By Guy Dabi GAB-LEYBA; Claire MAINGUY
  10. Are ‘Flow of Ideas’ and ‘Research Productivity’ in secular decline? By Peter Cauwels; Didier Sornette

  1. By: King'ori S. Ngumo; Kioko W. Collins; Shikumo H. David
    Abstract: Microfinance provides strength to boost the economic activities of low-income earners and thus contributes to eradication of poverty. However, microfinance institutions face stringent competition from commercial banks; the growth of microloan activities of commercial banks may confront microfinance institutions with increased competition for borrowers. In Kenya, the micro finance sector has extremely high competition indicated by the shifting market share and profitability. This study sought to examine the determinants of financial performance of Microfinance banks in Kenya. The study adopted a descriptive research design and used secondary data from 7 Microfinance banks for a period of 5 years from 2011 to 2015. The data collected was analyzed using correlation and regression analysis. The study found a positive and statistically significant relationship between operational efficiency, capital adequacy, firm size and financial performance of microfinance banks in Kenya. However, the study found an insignificant negative relationship between liquidity risk, credit risk and financial performance of microfinance banks in Kenya. The study concluded that there is direct relationship between operational efficiency, capital adequacy, firm size and financial performance of microfinance banks in Kenya.
    Date: 2020–10
  2. By: Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom)
    Abstract: Video discussion of measuring productivity growth in the presence of unaccounted natural resources
    Keywords: environmental economics, productivity growth, undergraduate, video
    JEL: O47 Q50 Q56
    Date: 2020–08
  3. By: Mark Mitchell; Marta Favara; Catherine Porter; Alan Sánchez
    Abstract: We estimate a dynamic model of multidimensional human capital development from childhood through adolescence and into early adulthood for a Peruvian cohort born in 1994. We exploit multiple measures of cognitive and socio-emotional skills and a latent factor structure to estimate flexible skills production functions between the ages of 8 and 22. We focus particularly on socio-emotional skill development, and provide the first estimates of such skill production over such a long period in a developing country context. In the last period, when individuals reach adulthood at age 22, we show that socio-emotional skills can be separated into two distinct domains - social skills and task effectiveness skills- which develop differently especially with regard to time use and cross-productivity with cognition. We find that individuals with higher task effectiveness are less likely to have engaged in risky behaviours such as smoking, taking drugs, and engaging with gangs.
    Keywords: Human capital, child development, dynamic factor analysis, socio-emotional skills
    JEL: C38 J13 J24 O15 O54
    Date: 2020
  4. By: Deng, Liuchun; Plümpe, Verena; Stegmaier, Jens
    Abstract: Using a newly collected dataset with plant-level information of robot use from 2014 to 2018, we provide the first microscopic portrait of robotisation in Germany and study the potential determinants of robot adoption. Our descriptive analysis uncovers five stylised facts concerning both extensive and, perhaps more importantly, intensive margin of plant-level robot use: (1) Robot use is relatively rare with only 1.55% German plants using robots in 2018. (2) The robot distribution is highly skewed. (3) New robot adopters contribute substantially to the recent robotisation. (4) Robot users are exceptional along several dimensions of plant-level characteristics. (5) Heterogeneity in robot types matters. Our regression results further suggest that plant size, low-skilled labour intensity, and exporter status all have strong and positive effect on future probability of robot adoption. However, controlling for plant size, we find that plant-level productivity has no, if not negative, impact on robot adoption.
    Keywords: robots,robot adoption,automation,labour,productivity,plant-level
    JEL: J24 O14 O33
    Date: 2020
  5. By: Gilbert Cette (BDF - banque de france - Banque de France, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Aurélien Devillard (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Vincenzo Spiezia (OECD - The Organisation for Economic Coopération and Development)
    Abstract: Using a new and original database, our paper contributes to the growth accounting literature with three original aspects: first, it covers a long period from the early 60's to 2019, just before the COVID-19 crisis; second, it analyses at the country level a large set of economies (30); finally, it singles out the growth contribution of ICTs but also of robots. The original database used in our analysis covers 30 developed countries and the Euro Area over a long period allowing to develop a growth accounting approach from 1960 to 2019. This database is built at the country level. Our growth accounting approach shows that the main drivers of labor productivity growth over the whole 1960-2019 period appear to be TFP, non-ICT and non-robot capital deepening, and education. The overall contribution of ICT capital is found to be small, although we do not estimate its effect on TFP. The contribution of robots to productivity growth through the two channels (capital deepening and TFP) appears to be significant in Germany and Japan in the sub-period 1975-1995, in France and Italy in 1995-2005, and in several Eastern European countries in 2005-2019. Our findings confirm also the slowdown in TFP in most countries from at least 1995 onwards. This slowdown is mainly explained by a decrease of the contributions of the components 'others' in the capital deepening and the TFP productivity channels.
    Keywords: Growth,Productivity,ICTs,Robots
    Date: 2020–10
  6. By: Asantewaa, Adwoa (World Bank Group and Durham University Business School, Durham University, UK); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School)
    Abstract: Since the late 1980s, electricity sector reforms have transformed the structure and organisation of the sector in many countries across the world. While the outcomes of reforms in developed and some developing countries have been extensively examined, there is limited analysis on the outcomes of the reforms in sub-Saharan Africa (SSA). This paper analyses the performance of electricity sector reforms in 37 SSA countries between 2000 and 2017. We use a Stochastic Frontier Analysis approach to estimate a multi-input-multi-output distance function to assess the impact of reform steps and institutional features on sector-level performance. The results indicate that reforms in SSA increased the installed generation capacity per capita and plant load factor but did not reduce technical network losses. Also, the presence of an electricity law, sector regulator, vertical unbundling, and private participation in the management of assets have a positive impact on reform performance. Perceptions of non-violent institutional features such as corruption, regulatory quality and governance effectiveness do not seem to have significant effect on reform performance, but perceptions of political stability, violence and terrorism influence reform outcomes. The effects of hydroelectric capacity on reform performance was found to be negligible while larger electricity systems were found to be more efficient reformers. We conclude that a workable reform in SSA involves vertical unbundling with an electricity law, a regulator and private ownership and management of assets where desirable. However, the positive outcomes go hand in hand with an increase of technical network losses, and hence emphasis should be placed on decoupling these losses from generation capacity and plant load factor.
    Keywords: Electricity Sector Reform; Sub-Saharan Africa; Institutions; Stochastic Frontier Analysis; Distance Function
    JEL: H54 L94 O13 P11 Q48
    Date: 2020–08–06
  7. By: Alexander Jaax (OECD); Louise Johannesson (OECD); Thi Xuan Thu Nguyen (Diplomatic Academy of Viet Nam)
    Abstract: This paper draws on detailed firm-level and worker-level information to explore the link between services imports and employment dynamics in the case of Viet Nam. The econometric analysis consists of two parts. First, data covering formal firms are exploited to investigate the relationship between sector-level services import intensity and firm-level employment and firm-level average wages. The second part is conducted at the level of workers and also covers informal workers. The results show that sector-level services import intensity positively affects firm-level average wages of Vietnamese formal services firms, whereas a small negative effect on firm-level employment is observed. For manufacturing firms, there is no conclusive evidence regarding the association between services import intensity and firm-level employment. The worker-level analysis identifies a positive wage effect of occupation-level exposure to services imports on domestic workers in foreign-owned businesses in all sectors. The results also suggest that higher skilled workers might be more likely to benefit from services imports. This paper provides support for an approach that combines an emphasis on lowering firms’ costs of sourcing foreign services inputs with efforts to strengthen SMEs’ capabilities and improve workers’ skills.
    Keywords: employment, individual and firm-level data, trade, wages, worker heterogeneity
    JEL: F14 F16 F61 J21 J30 C26
    Date: 2020–10–23
  8. By: João Z. Carrilho; Rui N. Ribeiro
    Abstract: This paper is a review of the institutions and the performance of the agricultural sector in Mozambique, using an analysis table adapted to the assessment of the connections between the institutions and economic development. In the first part, information is presented on the performance of the sector between 2008 and 2017, showing a per capita reduction in productivity and the production of foodstuffs. The second part offers an analysis on the extent to which, and the way that, the development of the sector institutions influenced agricultural performance during that period.
    Keywords: Agriculture, Environment, Institutions, agricultural policy, Productivity
    Date: 2020
  9. By: Guy Dabi GAB-LEYBA; Claire MAINGUY
    Abstract: This paper examines the effect of natural resource endowment on the efficiency of public spending on primary education in resource-rich developing countries. The order-m non-parametric technique is used for this purpose on a sample of 138 developing countries covering the period 1995-2018. The results reveal that the endowment of natural resources and the low efficiency of a State reduce the efficiency of public spending on primary education.
    Keywords: Education, public spending on primary education, fragility, efficiency, natural resources, non-parametric approach, resource-rich countries.
    JEL: C14 H52 L70 O11
    Date: 2020
  10. By: Peter Cauwels (ETH Zürich; Director Quaerens CommV); Didier Sornette (ETH Zürich - Department of Management, Technology, and Economics (D-MTEC); Swiss Finance Institute; Southern University of Science and Technology; Tokyo Institute of Technology)
    Abstract: It is widely held true that fundamental scientific knowledge has been accelerating exponentially over the past centuries and will continue to do so for the foreseeable future. Moreover, endogenous growth theory postulates that this exponential accumulation of knowledge is the main source of the ubiquitous exponential economic growth. We test these claims by constructing two new series of knowledge indices, one representing the historical evolution of the Flow of Ideas, the other of the Research Productivity, for the time period between 1750 and 1988. Three different geographical regions are covered: 1) Continental Europe, 2) the United Kingdom, and 3) the United States; and two disciplines: a) the physical sciences, and b) the life sciences. Our main result is that scientific knowledge has been in clear secular decline since the early 1970s for the Flow of Ideas and since the early 1950s for the Research Productivity. We also observe waves coinciding with the three industrial and technological revolutions, in particular in the United Kingdom. Overall, our results support the Kuhnian theory of knowledge creation through scientific revolutions, punctuation and paradigm shifts and falsify the gradualism that lies at the basis of the currently prevailing economic paradigm of endogenous growth.
    Keywords: research productivity, knowledge accumulation, economic growth, endogenous growth, exponential growth, S-curve, technological progress, discovery, invention, innovation, scientific revolutions
    JEL: C80 H50 J24 O30 O31 O40 O50
    Date: 2020–10

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