nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2020‒12‒14
eleven papers chosen by

  1. Distant but Close in Sight. Firm-level Evidence on French-German Productivity Gaps in Manufacturing By Thomas Grebel; Mauro Napoletano; Lionel Nesta
  2. Productivity effects of processing and ordinary export market entry: A time-varying treatments approach By Sourafel Girma; Holger Goerg
  3. Sectoral productivity vis-Ã -vis the US and heterogeneity within the EU27: the role of firm size distribution and firm demographics By David Martinez Turegano
  4. Champions of digital transformation? The dynamic capabilities of hidden champions By Wittenstein, Daniel
  5. Unions, Collective Bargaining and Firm Performance By Laroche, Patrice
  6. Growing like China: Firm performance and global production line position By David Chor; Kalina Manova; Zhihong Yu
  7. Land market distortions and aggregate agricultural productivity: Evidence from Guatemala By Britos, Braulio; Hernandez, Manuel A.; Robles, Miguel; Trupkin, Danilo R.
  8. Infrastructure Bottlenecks and Dual-Channel Exporters By Xiao Feng; Yongjin Wang; Laixun Zhao
  9. What Are the Labor and Product Market Effects of Automation?: New Evidence from France By Philippe Aghion; Céline Antonin; Simon Bunel; Xavier Jaravel
  10. The effects of body-worn cameras on police efficiency: A study of local police agencies in the US. By Alda, Erik
  11. Hospital Competition in the Netherlands : An Empirical Investigation By Berden, Carolien; Croes, R.; Kemp, R.; Mikkers, Misja; van der Noll, Rob; Shestalova, V.; Svitak, Jan

  1. By: Thomas Grebel (Technische Universität Ilmenau, Germany); Mauro Napoletano (OFCE Sciences-Po; SKEMA Business School); Lionel Nesta (Université Côte d'Azur, France; GREDEG CNRS; OFCE, SciencesPo; SKEMA Business School)
    Abstract: We study the productivity level distributions of manufacturing firms in France and Germany, and how these distributions evolved across the Great Recession. We show the presence of a systematic productivity advantage of German firms over French ones in the decade 2003-2013, but the gap has narrowed down after the Great Recession. Convergence is explained by the better growth performance of French firms in the post-recession period, especially of those located in the top percentiles of the productivity distribution. We also highlight the role of sectoral growth, firm size and export intensity in explaining the above convergence. In contrast, the contribution of allocative efficiency was small.
    Keywords: International productivity gaps, productivity distributions, firm level comparisons
    JEL: L10 N10 D24
    Date: 2020–11
  2. By: Sourafel Girma; Holger Goerg
    Abstract: China’s policy of encouraging export processing has been the topic of much discussion in the academic literature and policy debate. We use a recently developed econometric approach that allows for time varying “treatments” and estimate economically and statistically significant positive causal effects of entering into export processing on subsequent firm level productivity. These productivity effects are shown to be larger than those accruing to firms who enter into ordinary exporting. Interestingly, the estimation of quantile treatment effects shows that the positive effects do not accrue similarly to all types of firms, but are strongest for those at the low to medium end of the distribution of the productivity variable. We also find that export processors gain more when entering the industrialised North rather than the South, while this does not appear to matter much for ordinary exporting.
    Keywords: export processing; firm performance, China; time varying treatments
    Date: 2020
  3. By: David Martinez Turegano (European Commission - JRC)
    Abstract: Labour productivity growth in developed economies has slowed down during the last decade relative to the pre-Great Recession period. The EU27 has been no exception to this trend, keeping both a large negative gap relative to the US and strong country heterogeneity following an uneven convergence process between Member States. Based on these stylized facts, in this paper we investigate which are the main explanatory variables accounting for productivity heterogeneity within the EU, both in level and growth terms. From a policy perspective, our findings suggest a number of areas in which action seems to be warranted, improving technological adoption, increasing innovation intensity, boosting the capital triad (human, tangible and intangible assets), and, with respect to the two micro-structural characteristics we put a focus on, eliminating barriers to growth in firm size and facilitating the entry and exit of enterprises. These same recommendations are even more valid in the specific case of business services, for which productivity performance and convergence seem more sensitive to progress in those policy areas.
    Keywords: Productivity, convergence, sectoral heterogeneity, firm structure, business demographics.
    JEL: E24 J24 L11 O47
    Date: 2020–11
  4. By: Wittenstein, Daniel
    Abstract: Hidden Champions (HCs) are small- and medium-sized global market leaders that repeatedly show superior innovation capabilities and economic performance. However, empirical evidence on how the digital transformation may affect their success story remains scarce. I argue that HCs show stronger dynamic capabilities which enables them to be better prepared for the digital transformation than non-HCs firms. To test this hypothesis, I use data from the Mannheim Innovation Panel. This allows me to identify a representative set of German HCs and develop a firm digital readiness index, reflecting the use of important digital technologies and applications. An instrumental variable estimation suggests that higher levels of digital readiness lead to an increase in share of revenue from innovations and productivity. In combination with higher average digital readiness levels of HCs compared to non-HCs, my findings indicate that HCs may indeed be better prepared for the digital transformation.
    Keywords: hidden champions,digital transformation,digital readiness,digital preparedness,performance effects,innovation,dynamic capabilities,instrumental variable estimation
    JEL: L60 L19 M19 O32 O33
    Date: 2020
  5. By: Laroche, Patrice
    Abstract: The impact of unions on firm performance has been the subject of debate and controversy in most industrialized countries, particularly in the United States and the United Kingdom. The purpose of this chapter is to review and assess the scope and limitations of the economic analysis of unions as well as the controversies surrounding the conclusions of existing empirical research. Although it is difficult to draw firm and general conclusions on the effects of unions on firm performance, the existing results lead us to consider unions not solely in terms of their costs for the company. Empirical results suggest that unionism is often associated with higher productivity but this relationship might vary across industries, institutional contexts and over time. Estimates of the causal mechanisms through which unions affect productivity allow a better understanding of the effects of unions. The literature on the effect of unions on productivity recognizes that part of this effect may work through reducing employee turnover and other mechanisms, such as technological and organizational innovations, which are essential factors of productivity growth. Recent studies dealing with the effects of unions on firm profits support Freeman and Medoff's (1984) conclusion that unionization is associated with lower profitability. Finally, union activities, especially collective bargaining, trade off some economic efficiency for greater justice in workplaces and reduced inequalities.
    Keywords: unions,collective bargaining,productivity,innovation,high-performance work practices,performance
    JEL: J5 J51 J53 M54
    Date: 2020
  6. By: David Chor; Kalina Manova; Zhihong Yu
    Abstract: Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.
    Keywords: Global value chains, production line position, upstreamness, firm heterogeneity, firm lifecycle, China.
    Date: 2020
  7. By: Britos, Braulio; Hernandez, Manuel A.; Robles, Miguel; Trupkin, Danilo R.
    Abstract: Farm size and land allocation are important factors in explaining lagging agricultural productivity in developing countries. This paper examines the effect of land market imperfections on land allocation across farmers and aggregate agricultural productivity. We develop a theoretical framework to model the optimal size distribution of farms and assess to what extent market imperfections can explain non-optimal land allocation and output in-efficiency. We measure these distortions for the case of Guatemala using agricultural census microdata. We find that due to land market imperfections aggregate output is 19% below its efficient level for both maize and beans and 31% below for coffee, which are three major crops produced nationwide. The regions with higher distortions show a higher dispersion in land prices and less active rental markets. We also find that the degree of land market distortions across locations co-variate with road accessibility and ethnicity and, in a lower extent, with education.
    Keywords: GUATEMALA; LATIN AMERICA; CENTRAL AMERICA; NORTH AMERICA; land markets; agricultural productivity; maize; beans; Coffea; coffee; crop production; land market distortions; output inefficiency
    Date: 2020
  8. By: Xiao Feng (School of Economics, Nankai University, China); Yongjin Wang (School of Economics, Nankai University, China); Laixun Zhao (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: This paper investigates how infrastructure bottlenecks affect a firm's export mode. We find that under infrastructure bottlenecks, the most efficient firms become the so-called "dual-channel exporters", which export only a fraction of their products directly, with the remaining products exported through intermediaries. Using linked annual survey of industrial production and transaction-level customs datasets in China, we document that a significant share of firms are the dual-channel exporters. Further, these exporters are more productive than the direct and indirect exporters. Our quantitative model suggests that the elimination of exporting capacity constraint arising from infrastructure bottlenecks leads to substantial aggregate productivity growth via improved resource reallocation.
    Keywords: Infrastructure bottlenecks, Dual-channel Exporters, Productivity, Capacity constraint, Resource misallocation
    JEL: F10 O18
    Date: 2019–09
  9. By: Philippe Aghion (Harvard University); Céline Antonin (Observatoire français des conjonctures économiques); Simon Bunel; Xavier Jaravel (London School of Economics and Political Science)
    Abstract: What are the effects of automation in the labor and product markets? A host of factors may be at play. Automating the production process may displace certain workers, raising the possibility of technological unemployment, but these displacement effects could be offset by a productivity effect. Automation may induce productivity gains, increase market demand and the scale of production, and in turn increase labor demand. Depending on the extent to which productivity gains are passed through to consumers by producers, consumers could benefit from lower prices or producers could retain higher profits. Finally, because of business-stealing effects from firms that automate and displace their competitors, the industry-level employment and the price and profit effects of automation may differ from their firm-level or plant-level impacts. [First paragraph]
    Keywords: Automation; Employment; Plant-level; Firm-level; Labor market; Product market; Manufacturing
    Date: 2020–07
  10. By: Alda, Erik
    Abstract: Do Body-Worn Cameras improve police efficiency? This study answers this question in the context of a sample of local police agencies in the US, where the adoption of BWCs by police agencies has increased significantly in recent years. To estimate the effects of BWCs on police efficiency, I exploited the differences in the adoption of BWCs between agencies that acquired them ("acquirers") and agencies that deployed them ("deployers"). Using a multiple stage approach, in the first stage I estimated the efficiency of local police agencies using a robust order-m model. In the second stage, I estimated the effects of BWCs using a range of matching estimators and an instrumental variable model. The first stage results show that police agencies could improve their efficiency by 31 percent from 0.76 to 1. The second stage matching and IV estimates suggest that BWCs can help improve police efficiency between eight and 21 percentage points. The effects are larger for those agencies that fully deployed BWCs with their officers. Overall, this study’s results support the argument that BWCs can help improve police efficiency
    Keywords: Police, Performance, Efficiency, Data Envelopment Analysis, Matching Estimators, Instrumental Variables
    JEL: C26 D24 H11 H44 L23
    Date: 2020–10–31
  11. By: Berden, Carolien; Croes, R.; Kemp, R.; Mikkers, Misja (Tilburg University, School of Economics and Management); van der Noll, Rob; Shestalova, V. (Tilburg University, School of Economics and Management); Svitak, Jan (Tilburg University, School of Economics and Management)
    Date: 2019

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