nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2020‒12‒21
twelve papers chosen by

  1. A Generalization of Environmental Productivity Analysis By Arnaud Abad; P Ravelojaona
  2. The effect of climate policy on productivity and cost pass-through in the German manufacturing sector By Hintermann, Beat; Zarkovic, Maja; di Maria, Corrado; Wagner, Ulrich J.
  3. Technology Within and Across Firms By Xavier Cirera; Diego A. Comin; Marcio Cruz; Kyung Min Lee
  4. Knowledge Diffusion and Financial Development Thresholds By Konstantinos Dellis
  5. New Technologies, Productivity, and Jobs: The (Heterogeneous) Effects of Electrification on US Manufacturing By Martin Fiszbein; Jeanne Lafortune; Ethan G. Lewis; José Tessada
  6. Formalization and productivity: Firm-level evidence from Viet Nam By Jann Lay; Tevin Tafese
  7. An analysis of the efficiency of Italian museums using a generalised conditional efficiency model By Calogero Guccio; Marco Martorana; Isidoro Mazza; Giacomo Pignataro; Ilde Rizzo
  8. The Impact of ICTs and Digitalization on Productivity and Labor Share: Evidence from French firms By Cette Gilbert; Nevoux Sandra; Py Loriane
  9. Is innovation in ICT valuable for the efficiency of Italian museums? By Calogero Guccio; Marco Ferdinando Martorana; Isidoro Mazza; Giacomo Pignataro; Ilde Rizzo
  10. Distributed Generation and Cost Efficiency of German Electricity Distribution Network Operators By Just, Lisa; Wetzel, Heike
  11. Foreign Direct Investment, Backward Linkages, and Productivity Spillovers By Jacob Jordaan; Wim Douw; Christine Zhenwei Qiang
  12. Monetary policy, firm exit and productivity By Hartwig, Benny; Lieberknecht, Philipp

  1. By: Arnaud Abad (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); P Ravelojaona (UPVD - Université de Perpignan Via Domitia)
    Abstract: This paper aims to analyse environmental Total Factor Productivity (TFP) change. Indeed, innovative environmental TFP measures are introduced through convex and non convex environmental production processes. Hence, the impacts of input and output quality change on environmental productivity variation are underscored. In addition, general decomposition of the new ratio-and difference-based environmental TFP measures is proposed.
    Keywords: Environmental efficiency,Non Convexity,Pollution-generating Technology,Total Factor Productivity Indices
    Date: 2020–10–12
  2. By: Hintermann, Beat (University of Basel); Zarkovic, Maja (University of Basel); di Maria, Corrado; Wagner, Ulrich J.
    Abstract: We investigate productivity and cost pass-through of German manufacturing firms using administrative data from 2001 to 2014. Our framework allows for the estimation of quantity-based production functions for multi-product firms while controlling for unobserved productivity shocks and unobserved input quality. Using our parameter estimates, we can compute total factor productivity, markups and marginal costs. We find no effect of the EU ETS on firm productivity or profits for the whole sector, and a positive effect for some industries. Firms pass on shocks to materials costs completely, or even more than completely, whereas pass-through of energy costs is around 35-60%. Although pass-through of energy costs is incomplete, it nevertheless allowed firms to recover more than their total carbon costs due to generous free allocation of allowances. Our results add to the recent literature concerning the causal effects of climate policy on firms and are relevant for policy makers when defining the level of free allowance allocation to industry.
    Keywords: Productivity; production function; markup; cost pass-through; EU ETS; climate policy
    JEL: D24 H23 Q52 Q54
    Date: 2020–09–30
  3. By: Xavier Cirera; Diego A. Comin; Marcio Cruz; Kyung Min Lee
    Abstract: We collected data on the sophistication of technologies used at the business function level for a representative sample of firms in Vietnam, Senegal, and the Brazilian state of Ceará. Our analysis finds a large variance in technology sophistication across the business functions of a firm. Specifically, the within-firm variance in technology sophistication is greater than the variance in sophistication across firms, which in turn is greater than the variance in sophistication across regions or countries. We document a stable cross-firm relationship between technology at the business function and firm levels that we name the technology curve. We uncover significant heterogeneity in the slopes of the technology curves across business functions, a finding that is consistent with non-homotheticities in firm-level technology aggregators. Firm productivity is positively associated with the within-firm variance and the average level of technology sophistication. Development accounting exercises show that cross-firm variation in technology accounts for one-third of cross-firm differences in productivity and one-fifth of the agricultural versus non-agricultural gap in cross-country differences in firm productivity.
    JEL: D2 E23 L23 O10 O40
    Date: 2020–11
  4. By: Konstantinos Dellis
    Abstract: Foreign direct investment (FDI) has grown strongly as a major form of international capital transfer over the past decades. Countries all over the world compete for direct investment flows, as they are considered less volatile than portfolio investment and are expected to spur long-term growth. The attraction of FDI flows depends inter alia on a number of host country attributes, including macroeconomic, geographical, and institutional variables. Additionally, the extent to which FDI inflows contribute to domestic productivity and long-term growth is conditional on characteristics that shape a countryÕs absorptive capacity. This paper uses country-level data from OECD economies over the 2005-2016 period to empirically gauge the effect that FDI inflows have on recipient country productivity and innovative performance. Furthermore, it examines the potential of threshold effects regarding the development of the host economy financial system insofar as the latter is considered a conducive force for spillover effects. In the vein of the trade-growth literature we measure the effect of the foreign R&D stock weighted by bilateral capital goods imports and FDI flows looking at Total Factor Productivity and Patents per population at the economy-level. The results indicate that the depth and efficiency of the destination country financial system provides a mediation mechanism for the realization of positive externalities associated with MNC presence. Most of the financial variables appear to facilitate knowledge spillovers above a certain threshold value irrespective of that being exogenously or endogenously determined. Finally, this exercise yields fruitful policy lessons for Greek economy. More specifically, the ongoing process of restructuring the stressed domestic financial system combined with the incremental completion of the Banking and Capital Markets Union at the EU level could serve as a conduit for speeding the catch-up process to the technological frontier.
    Keywords: Foreign direct investment, productivity, innovation
    Date: 2020–12
  5. By: Martin Fiszbein; Jeanne Lafortune; Ethan G. Lewis; José Tessada
    Abstract: We use city-industry data from 1890 to 1940 to identify the impact of electricity on manufacturing. We exploit cross-industry variation in pre-electricity energy intensity combined with geographic variation in proximity to early hydroelectric power plants. Labor productivity gains from the arrival of electricity were rapid and long-lasting. Electricity was labor-saving, induced capital deepening, and a hollowing out of the labor skills distribution. We document significant heterogeneity in electricity's effects: in sector-county pairs where the average firm was initially large, we find no significant expansion in employment, while in markets with relatively small firms, output and employment increased.
    JEL: J24 L11 O33
    Date: 2020–11
  6. By: Jann Lay; Tevin Tafese
    Abstract: Using a firm-level panel dataset on private small- and medium-sized enterprises (SMEs) in Viet Nam's manufacturing sector, this paper examines productivity dynamics of formal and informal firms. We decompose productivity changes into changes within and between formal and informal firms. We assess the contributions of firm entry and exit as well as informal-formal transitions. Our results show that productivity is considerably lower and misallocation more prevalent in the informal than in the formal sector.
    Keywords: formalization, Productivity, Firm productivity, Viet Nam, Misallocation
    Date: 2020
  7. By: Calogero Guccio (Department of Economics and Business, University of Catania); Marco Martorana (Department of Economics and Business, University of Catania); Isidoro Mazza (Department of Economics and Business, University of Catania); Giacomo Pignataro (Department of Economics and Business, University of Catania); Ilde Rizzo (Department of Economics and Business, University of Catania)
    Abstract: Museums are among the most relevant cultural institutions and assume a central role from the cultural and the economic perspectives in a country having an outstanding cultural heritage, such as Italy, which makes the evaluation of their efficiency of primary importance. However, so far, the literature evaluating museums’ efficiency has often neglected the distinction between outputs under the direct control of museums and outcomes, which depend on users’ involvement, thus providing incorrect conclusions on museums’ performance. In this paper, we employ a generalised conditional efficiency model to assess the true efficiency of Italian museums, i.e. the efficiency in the provision of museums’ service potential, and to consistently deal with the impact on the efficiency of the socio-demographic and institutional environment in which museums operate. Results show that the operational environment matters. Among other aspects, conditional estimates suggest that higher income levels and larger hospitality sectors positively influence museums efficiency.
    Keywords: Cultural heritage; Museums; technical efficiency; Non-parametric Frontier; FDH; Conditonal estimates.
    JEL: Z1 C14 C61 I21
    Date: 2019–12
  8. By: Cette Gilbert; Nevoux Sandra; Py Loriane
    Abstract: Taking advantage of an original firm-level survey carried out by the Banque de France, we empirically investigate how the employment of ICT specialists (in-house and external) and the use of digital technologies (cloud and big data) have an impact on firm productivity and labor share. Our analysis relies on the survey responses in 2018 of 1,065 French firms belonging to the manufacturing sector and with at least 20 employees. To tackle potential endogeneity issues, we adopt an instrumental variable approach as proposed by Bartik (1991). The results of our crosssection estimations point to a large effect: ceteris paribus, the employment of ICT specialists and the use of digital technologies improve a firm’s labor productivity by about 23% and its total factor productivity by about 17%. Conversely, the employment of in-house ICT specialists and the use of big data both have a detrimental impact on labor share, of about 2.5 percentage points respectively.
    Keywords: Productivity, ICT, digitalization
    JEL: O3 O4 J24 L11
    Date: 2020
  9. By: Calogero Guccio (Department of Economics and Business, University of Catania); Marco Ferdinando Martorana (Department of Economics and Business, University of Catania); Isidoro Mazza (Department of Economics and Business, University of Catania); Giacomo Pignataro (Department of Economics and Business, University of Catania); Ilde Rizzo (Department of Economics and Business, University of Catania)
    Abstract: This paper investigates the influence of information and communication technologies (ICT) on the efficiency in attracting visitors of Italian museums. Notwithstanding the extensive literature on museum performance measurement, the analysis of the role of technological innovation is relatively neglected. As a first attempt to fill this lacuna, this study presents a two-stage analysis of a novel sample of Italian state-owned museums built by merging information drawn from different sources. In the first stage, we use Data Envelopment Analysis (DEA) and bootstrapping technique to measure the efficiency of museums. In the second stage, we use a bootstrap truncated regression approach to test the extent to which different forms of ICT affect museum efficiency. We distinguish the ICT investments into in situ and online services, since the former improve the visitors’ experience on site, while the latter can prepare for the visit or, even, be a substitute of the visit. The results reveal that the use of ICT is generally associated with better performances but in situ services shows to play a major role.
    Keywords: museums; ICT; technological innovation; efficiency; Data Envelopment Analysis; bootstrap truncated regression
    JEL: C14 C61 I21 Z1
    Date: 2020–12
  10. By: Just, Lisa (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: In this paper, we use a comprehensive and unique data set of financial, technical and structural characteristics of German distribution network operators from 2011 to 2017 to estimate both the transient and persistent cost efficiency of German distribution network operators. In addition, we analyze the effect of an increasing capacity of distributed generation from renewable energy sources on the total costs of distribution network operators. Our results indicate an average cost reduction potential of approximately 12 percent in the short term and approximately 18 percent in the long term for German electricity distribution network operators. Furthermore, we find that distributed generation from renewable energy sources is a significant cost driver in the production process of network operators. Our study thus contributes to the ongoing debate on incentive regulation and efficiency benchmarking in electricity distribution industries and provides valuable insights for policymakers and regulators.
    Keywords: Electricity distribution; regulation; transient cost efficiency; persistent cost efficiency; distributed generation; stochastic frontier analysis
    JEL: D24 L23 L51 L94
    Date: 2020–12–10
  11. By: Jacob Jordaan; Wim Douw; Christine Zhenwei Qiang
    Keywords: International Economics and Trade - Foreign Direct Investment International Economics and Trade - Globalization and Financial Integration International Economics and Trade - Trade Finance and Investment Macroeconomics and Economic Growth - Investment and Investment Climate Private Sector Development - Competitiveness and Competition Policy
    Date: 2020–05
  12. By: Hartwig, Benny; Lieberknecht, Philipp
    Abstract: We analyze the influence of monetary policy on firms' extensive margin and productivity. Our empirical evidence for the U.S. based on a macro-financial SVAR suggests that expansionary monetary policy shocks stimulate corporate profits, reduce firm exit and increase firm entry. In the medium run, exit overshoots the baseline. We rationalize these findings in a general equilibrium model featuring endogenous entry and exit. In the model, expansionary monetary policy shocks increase firm profits by stimulating aggregate demand and thereby allow less productive firms to remain in the market. As the monetary stimulus fades, these lessproductive firms become unprofitable such that exit overshoots. This exit channel of monetary policy implies a flatter aggregate supply curve and therefore amplifies output responses, but dampens inflationary effects.
    Keywords: firm exit,firm entry,extensive margin,corporate profits,monetarypolicy
    JEL: E24 E32 E52 E58 L11
    Date: 2020

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