nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2021‒03‒08
twenty-two papers chosen by

  1. Agricultural total factor productivity growth, technical efficiency, and climate variability in sub-Saharan Africa By Bannor, Frank; Dikgang, Johane; Gelo, Dambala
  2. Technical efficiency of Vietnamese manufacturing firms: do FDI spillovers matter? By Canh Nguyen; Minh Le; Khoa Cai; Michel Simioni
  3. An Empirical Investigation of Productivity Spillovers along the Agricultural Supply Chain By Lence, Sergio H.; Plastina, Alejandro
  4. One Size Does Not Fit All: TFP in the Aftermath of Financial Crises in Three European Countries By Christian Abele; Agnes Benassy-Quere; Lionel Fontagné; Lionel Gérard Fontagné
  5. Good business practices improve productivity in Myanmar's manufacturing sector: Evidence from two matched employer-employee surveys By Paolo Falco; Henrik Hansen; John Rand; Finn Tarp; Neda Trifkovi?
  6. Efficiency of tax revenue administration in Africa By Onesmo Kaiya Mackenzie
  7. Land market distortions and aggregate agricultural productivity: evidence from Guatemala By Braulio Britos; Manuel Alejandro Hernandez; Luis Miguel Robles; Danilo Trupkin
  8. Non-linear Incentives, Worker Productivity, and Firm Profits: Evidence from a Quasi-Experiment By Freeman, Richard B.; Huang, Wei; Li, Teng
  9. Institutions and the Productivity Challenge for European Regions By Andres Rodriguez-Pose; Roberto Ganau;
  10. Home Sweet Home: Working from home and employee performance during the COVID-19 pandemic in the UK By Deole, Sumit S.; Deter, Max; Huang, Yue
  12. Top economics universities and research institutions in Vietnam: evidence from the SSHPA dataset By , AISDL
  13. Living on the edge: An anatomy of New Zealand’s most productive firms By Richard Fabling
  14. Government Spending Efficiency, Measurement and Applications: a CrossCountry Efficiency Dataset By António Afonso; João Tovar Jalles; Ana Venâncio
  15. Estimating Production Functions in Differentiated-Product Industries with Quantity Information and External Instruments By Nicolás de Roux; Marcela Eslava; Santiago Franco; Eric Verhoogen
  16. The impact of management practices on employee productivity: a field experiment with airline captains By Gosnell, Greer K.; List, John A.; Metcalfe, Robert D.
  17. Electricity Sector Reform Performance in Sub-Saharan Africa: A Parametric Distance Function Approach By Adwoa Asantewaa, Adwoa; Jamasb, Tooraj; Llorca, Manuel
  18. Firm Profits and Government Activity: An Empirical Investigation By Petar Jolakoski; Branimir Jovanovic; Joana Madjoska; Viktor Stojkoski; Dragan Tevdovski
  19. Does urban concentration matter for changes in country economic performance? By Roberto Ganau; Andres Rodriguez-Pose;
  21. Determining factors of financial performance of agricultural listed companies in China By , AISDL
  22. The Impact of CEOs’ Gender on Organisational Efficiency in the Public Sector: Evidence from the English NHS By , AISDL

  1. By: Bannor, Frank; Dikgang, Johane; Gelo, Dambala
    Abstract: Despite continuous reforms and increased spending in the agricultural sector, Africa remains a net food importer. Previous research has argued that agricultural productivity is lower in Africa than in all other parts of the world due to challenging ecological conditions – soil fertility challenges and extreme climate. Increasing the region’s food supply requires significant increases in agricultural productivity, which in turn depends on investment in research and development (R&D). This study examines how climate variability (proxied by rainfall variability) affects agricultural total factor productivity (TFP) of maize in 14 sub-Saharan African countries (SSA). Maize farming in Africa – due to its significance in regional food production, evident climate variability, and the need to significantly increase efficiency – is an ideal region of investigation for climate impacts on maize production. We apply a Data Envelopment Analysis (DEA) on the Malmquist Productivity Index (MPI) to decompose productivity growth into technical efficiency and technological progress. In addition, a single-stage maximum-likelihood estimation of a true fixed effect was used to investigate how climate variability affects maize productivity through technical efficiency. The results show that climate variability has a negative effect on technical efficiency in the agricultural production of maize. Furthermore, increased spending on R&D is required to enhance technical efficiency and productivity.
    Keywords: climate change,data envelopment analysis,maize,total factor productivity,research and development,technical efficiency
    JEL: Q1 Q5
    Date: 2021
  2. By: Canh Nguyen (VNU-HCM - Vietnam National University - Ho Chi Minh City); Minh Le (Banking University of Hochiminh city); Khoa Cai (Industrial University); Michel Simioni (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper investigates the spillover effect (backward, forward, and horizontal linkage) of foreign direct investment (FDI) firms on the technical efficiency of local firms. This research extends the literature by employing meta-frontier framework analysis which is superior to single stochastic analysis because each industry has a different combination of inputs (or dissimilar production technology). Using a large data set (178,700 firm-year observations), this paper finds evidence on the negative impact of the horizontal and forward linkages on the meta-technical inefficiency for the data set as a whole as well as in three economic regions, in private owned firms, and capital and labor-intensive sectors in Vietnam.
    Keywords: Forward and horizontal linkage,Vietnam.,Foreign direct investment,Backward,Meta translog inefficiency,Meta-frontier framework
    Date: 2021–02–01
  3. By: Lence, Sergio H.; Plastina, Alejandro
    Abstract: Total factor productivity (TFP) has long been recognized as a major engine of growth for U.S. agriculture in the post-war period, despite the methodological differences in the approaches used to calculate it.1 Furthermore, TFP growth in the farm sector compares very favorably to similar measures of productivity growth in other sectors of the U.S. economy (Kendrick and Grossman 1980; Jorgenson, Gollop, and Fraumeni 1987; Jorgenson and Schreyer 2013; Jorgenson, Ho, and Samuels 2014; Garner and others 2019). In particular, Jorgenson, Ho, and Samuels (2014) find that although the farm sector ranked 15th out of 65 industries in its contribution to national value-added from 1947 to 2010, it ranked fifth in its contribution to national productivity growth, accounting for 7.5 percent of total U.S. TFP growth over the same period. Using a different data set, Garner and others (2019) find that the farm sector ranked fourth in TFP growth across 63 industries in the United States from 1987 to 2016.
    Date: 2020–01–01
  4. By: Christian Abele; Agnes Benassy-Quere; Lionel Fontagné; Lionel Gérard Fontagné
    Abstract: We analyse the impact of both the Global Financial Crisis of 2008 and the European sovereign and banking crisis of 2011-13 on firm-level productivity in France, Italy and Spain. We show that relying on a single break date in 2008 misses both the Eurozone crisis and countries' institutional specificities. Although leverage and financial constraints affect firm-level productivity negatively, high-leverage firms suffer more from financial constraints only in Italy, when they are relatively small or when their debt is of short maturity. These results call for approaches taking into consideration country-level characteristics of financial institutions and time varying financing constraints of the firms, instead of pooling data and adopting a common break date. One size does not fit all when it comes to identifying the impact of financial crises on firm level productivity.
    Keywords: total factor productivity, firm-level data, financial constraints, crises
    JEL: E22 E23 E44 D24
    Date: 2021
  5. By: Paolo Falco; Henrik Hansen; John Rand; Finn Tarp; Neda Trifkovi?
    Abstract: We look into the relationship between business practices and enterprise productivity using panel data with matched employer and employee information from Myanmar. The data show that micro, small, and medium-size enterprises in Myanmar typically do only a few modern business practices. Even so, through estimates of value-added functions and labour demand relations we find a positive and economically important association between business practices and productivity. The results are confirmed when we utilize employer-employee information to estimate Mincer-type wage regressions.
    Keywords: Business, Management, Productivity, Myanmar, Small and medium enterprises, Firm behaviour, Manufacturing firms
    Date: 2021
  6. By: Onesmo Kaiya Mackenzie (Stellenbosch University)
    Abstract: Achieving stable domestic tax revenue allows countries to finance their essential spending needs. For most countries in Africa, enhancing tax revenue is critical for sustainable development. To build up fiscal capacity, country experiences suggest the importance of tax administration reforms that aim at improving the performance of these institutions. Despite its importance, empirical literature on tax administration is limited, especially in Africa. Lack of comparable tax administrative data explains the scant literature. However, the African Tax Administration Forum (ATAF) has compiled a dataset for African countries which makes empirical analysis possible. The paper makes use of this administrative dataset available for 28 African countries for the 2012 - 2017 period to investigate the efficiency of tax administration in Africa. It applies Data Envelopment Analysis (DEA), Stochastic Frontier Analysis (SFA) and Tobit regression to analyse efficiency scores, rank tax administrations and explore the factors that matter. Among the findings, the paper indicates minimal variation in efficiency across the African tax administrations and significant impact of the size of the informal sector, size of non-tax revenue, employee length of service and autonomy of the tax administration.
    Keywords: Tax administration, Efficiency, Domestic revenue, Development
    JEL: D24 H20
    Date: 2021
  7. By: Braulio Britos (University of Minnesota); Manuel Alejandro Hernandez (International Food Policy Research Institute); Luis Miguel Robles (Universidad del Pacífico); Danilo Trupkin (Instituto Interdisciplinario de Economía Política de Buenos Aires - UBA - CONICET)
    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 landallocation and output inefficiency. We measure these distortions for the case of Guatemala using agricultural census microdata. We find thatdue to land market imperfections aggregate output is 19% below its efficient level for both maize and beans and 31% below for coffee, whichare three major crops produced nationwide. The regions with higher distortions show a higher dispersion in land prices and less active rentalmarkets. We also find that the degree of land market distortions across locations co-variate with road accessibility and ethnicity and, in a lowerextent, with education.
    Keywords: Land Market Distortions, Output Inefficiency, Agricultural Productivity, Guatemala
    JEL: O13 Q15 O40
    Date: 2020–09
  8. By: Freeman, Richard B. (Harvard University); Huang, Wei (National University of Singapore); Li, Teng (National University of Singapore)
    Abstract: Using administrative data from a major Chinese insurance firm that raised its sales targets and rewards for insurance agents in a highly non-linear incentive system, we find that the improvement in productivity far outweighed the costs associated with bunching distortions and other gaming behaviors. Labor turnover decreased, which suggests that the extra pay for workers exceeded the non-pecuniary cost of extra effort by workers, and thus improved their well-being. The firm gained about two-thirds of the higher net output, making the reform profitable. Analysis of non-linear incentive systems should accordingly focus more on the productivity-enhancing than on the distortionary effects.
    Keywords: non-linear incentives, insurance commission, strategic gaming behavior, productivity, turnover rates
    JEL: J33 M52
    Date: 2021–02
  9. By: Andres Rodriguez-Pose; Roberto Ganau;
    Abstract: Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity has been overlooked by the literature. This paper addresses this gap by evaluating how institutional quality affects labour productivity growth and, particularly, its determinants at the regional level during the period 2003-2015. The results indicate that institutional quality influences regions’ labour productivity growth both directly —as improvements in institutional quality drive productivity growth— and indirectly —as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality.
    Keywords: Labour productivity; institutional quality; physical capital; human capital; innovation; regions; Europe
    JEL: E24 J24 O47 R11
    Date: 2021–02
  10. By: Deole, Sumit S.; Deter, Max; Huang, Yue
    Abstract: In 2020, the COVID-19 pandemic forced governments in many countries to ask employees to work from home (WFH) where possible. Using representative data from the UK, we show that increases in WFH frequency are associated with a higher self-perceived productivity per hour and an increase in weekly working hours among the employed. The WFH-productivity relationship is stronger for employees residing in regions worse affected by the pandemic and those who previously commuted longer distances, while it is weaker for mothers with childcare responsibilities. Also, we find that employees with higher autonomy over job tasks and work hours and those with childcare responsibilities worked longer hours when working from home. With prospects that WFH possibility may remain permanently open for some employees, we discuss our results' labor market policy implications.
    Keywords: Working from home,productivity,working hours,COVID-19 pandemic
    JEL: J22 J24
    Date: 2021
  11. By: Francesco Aiello (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Graziella Bonanno (Departimento di Economia, Università di Salerno); Francesco Foglia (Università Dante Alighieri, Reggio Calabria)
    Abstract: This study performs a meta-regression analysis with the aim of explaining the differences in results obtained when estimating a frontier for judicial institutions. The metadata set comprises 264 efficiency scores retrieved from 36 papers published from 1992 to 2019. The empirical setting allows for the control of publication bias as in Aiello and Bonanno (2018; 2019) and is based on a random-effects model estimated with the two-step random-effects maximum likelihood (REML) technique proposed by Gallet and Doucouliagos (2014). Results show that primary papers using parametric methods yield higher efficiency scores than non-parametric studies. Additionally, the estimated efficiency scores in primary papers decrease with the number of inputs and outputs and the sample size. Importantly, the efficiency scores from studies that analyse the first-instance courts are higher than those obtained for the appeal courts. Meta-regressions also highlight that the efficiency scores retrieved from primary papers focusing on a specific court type (only tax, civil or criminal) are higher than those obtained when the analysed courts are mixed.
    Keywords: District courts, Efficiency, Frontier models, Judicial system, Meta-analysis
    JEL: C14 C80 D63 K40 P37
    Date: 2021–02
  12. By: , AISDL
    Abstract: Economic research is vital for creating more suitable policies to facilitate economic growth. Employing a combination of descriptive and Bayesian analyses, this paper investigates the research landscape of the economics discipline in Vietnam, in particular, the leading affiliations in the field and how these institutions compare to each other in terms of productivity, the number of lead authors, new authors and publications' journal impact factor. We also examine the differences in the authors' productivity based on their age and gender. The dataset extracted from the SSHPA database includes 1,444 articles. The findings show that among top producers of economic research in Vietnam, seven are universities, leaving only one representative of research institutes. These top producers account for 52% of research output among 178 institutes recorded in the database. We also find a correlation between a researcher's affiliation, sex, and scientific productivity in Vietnam's economic discipline. Overall, publications by male researchers outnumber those by female ones in most of the top affiliations. The findings also indicate that 40–44 is the age group with the highest scientific productivity. Researchers' collaboration, which is observed through co-authorship, is on the rise in all of the top eight economic research affiliations. However, the quality of current Vietnam's scientific works in the discipline is questionable. Therefore, it is suggested that in order to sustain scientific productivity, economic researchers might need to balance the quantity and quality of their contributions.
    Date: 2021–02–15
  13. By: Richard Fabling (Independent Researcher)
    Abstract: Theory and international evidence suggest that firms at the New Zealand productivity frontier may be especially important for the diffusion of knowledge from the global productivity frontier, acting as a conduit for new technologies and ideas to flow into the domestic economy. We identify the NZ productivity frontier in a novel way that is robust to some sources of measurement error, and to criticism that the frontier label is dependent on arbitrary assumptions. We show that economic activity is concentrated in the upper deciles of the productivity distribution, and that frontier firms are disproportionately important to aggregate output, even relative to firms just outside the frontier. Compared to laggard firms, frontier firms: employ a more skilled workforce concentrated in major Urban Areas (particularly Auckland); have superior human resource management practices; are more export intensive; are more likely to have up-to-date technology (including UFB use); and to be in markets with no competitors.
    Keywords: Multifactor productivity; productivity frontier; productivity growth; management practices; innovation; exporting; foreign direct investment; competition
    JEL: D20 L20 M21 O31
    Date: 2021–03
  14. By: António Afonso; João Tovar Jalles; Ana Venâncio
    Abstract: This chapter conducts a review of the literature dealing with overall public sector performance and efficiency, it defines a methodology to assess public sector efficiency and it creates a novel and large cross-sectional panel dataset of government indicators and public sector efficiency scores. The focus is on a balanced sample covering all 36 OECD countries over the time period between 2006 and 2017. First, we define a set of economic and sociodemographic metrics necessary to construct performance composite indicators. Second, we calculate and report a full set of (input and output oriented) efficiency scores based on the performance indicators previously computed.
    Date: 2020
  15. By: Nicolás de Roux; Marcela Eslava; Santiago Franco; Eric Verhoogen
    Abstract: This paper develops a new method for estimating production-function parameters that can be applied in differentiated-product industries with endogenous quality and variety choice. We take advantage of data on physical quantities of outputs and inputs from the Colombian manufacturing survey, focusing on producers of rubber and plastic products. Assuming constant elasticities of substitution of outputs and inputs within fi rms, we aggregate from the fi rm-product to the firm level and show how quality and variety choices may bias standard estimators. Using real exchange rates and variation in the "bite" of the national minimum wage, we construct external instruments for materials and labor choices. We implement a simple two-step instrumental-variables method, fi rst estimating a difference equation to recover the materials and labor coeffcients and then estimating a levels equation to recover the capital coeffcient. Under the assumption that the instruments are uncorrelated with fi rms' quality and variety choices, this method yields consistent estimates, free of the quality and variety biases we have identif ed. Our point estimates differ from those of existing methods and changes in our preferred productivity estimator perform relatively well in predicting future export growth.
    Keywords: production-function estimation, quality, variety, external instruments
    JEL: L1 D24 O14 L65
    Date: 2021–01–26
  16. By: Gosnell, Greer K.; List, John A.; Metcalfe, Robert D.
    Abstract: Increasing evidence indicates the importance of management in determining firms’ productivity. Yet causal evidence regarding the effectiveness of management practices is scarce, especially for skilled labor in the developed world. In a field experiment measuring commercial airline captains’ productivity, we test four distinct management practices: performance monitoring, performance feedback, target setting, and prosocial incentives. These practices—particularly monitoring and target setting—significantly increase captains’ productivity on the targeted fuel-saving dimensions, with positive spillovers on job satisfaction and CO 2 emissions. The study reveals an uncharted research opportunity to delve into the black box of firms to examine the determinants of productivity among skilled labor.
    JEL: D01 J30 Q50 R40
    Date: 2020–04–01
  17. By: Adwoa Asantewaa, Adwoa; Jamasb, Tooraj; Llorca, Manuel
    Abstract: TSince 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.
    Date: 2021
  18. By: Petar Jolakoski; Branimir Jovanovic (The Vienna Institute for International Economic Studies, wiiw); Joana Madjoska; Viktor Stojkoski; Dragan Tevdovski
    Abstract: If firm profits rise to a level far above than what would have been earned in a competitive economy, this might give the firms market power, which might in turn influence the activity of the government. In this paper, we perform a detailed empirical study on the potential effects of firm profits and markups on government size and effectiveness. Using data on 30 European countries for a period of 17 years and an instrumental variables approach, we find that there exists a robust relationship between firm gains and the activity of the state, in the sense that higher firm profits reduce government size and effectiveness. Even in a group of developed countries, such as the European countries, firm power may affect state activity.
    Keywords: firm profits, government size, government effectiveness
    JEL: C23 H11 H50
    Date: 2021–02
  19. By: Roberto Ganau; Andres Rodriguez-Pose;
    Abstract: This paper uses a novel, globally-harmonised city-level dataset —with cities defined at the Functional Urban Area (FUA) level— to revisit the link between urban concentration and country-level economic dynamics. The empirical analysis, involving 108 low- and high-income countries, examines how differences in urban concentration impinge on changes in employment, Gross Domestic Product (GDP) per capita, and labour productivity at country level over the period 2000-2016. The results indicate that urban concentration reduces employment growth but increases GDP per capita and labour productivity growth. The returns of urban concentration are higher for high- than for low-income countries and are mainly driven by the ‘core’ of FUAs, rather than by sub-urban areas.
    Keywords: Urban concentration; Long-run economic dynamics; Employment growth; GDP per capita growth; Labour productivity growth; Cross-country analysis
    JEL: E24 O47 O57 R12
    Date: 2021–02
  20. By: Arisandi, Andre; Tanjung, Mariani St.B
    Abstract: This study was conducted to determine the level of profitability using the ratio of ROA (Return on Asset), ROE (Return on Equity), BOPO (Operating Expenses to Operating Income), and NPM (Net Profit Margin) to PT. BPR Raga Dana Sejahtera. The type of data used is secondary data obtained by the method of documentation taken from the published reports of BPR Raga Dana Sejahtera during the 2015-2019 period. This research was conducted using the 2015-2019 financial statements, namely the balance sheet and income statement. Based on the profitability analysis, it can be seen that ROA is in healthy condition and ROE is in less healthy condition. Then the bank's BOPO is in an inefficient position in managing operational costs to obtain operating income and the bank's NPM is said to be healthy in obtaining net income. The results showed that the level of bank profitability was quite stable and efficient in running company operations
    Date: 2021–02–01
  21. By: , AISDL
    Abstract: Determining factors of financial performance of agricultural listed companies in China by Liu, L.; Xu, J.; Shang, Y. (2020) Custos e @gronegócio on line - v. 16, n. 4, Oct/Dec. - 2020. ISSN 1808-2882
    Date: 2020–12–14
  22. By: , AISDL
    Abstract: Increasing operational efficiency is an objective relevant for all institutions, but it is essential in public entities and even more in public health systems because of the number of resources they consume and their impact on general welfare. This research analyses the effect that CEOs’ gender has on the operational efficiency of the entities they manage. Despite the impact that the management team and notably the CEO have on the development of institutions, studies on their effect on performance are practically non-existent, especially for public organisations. We have used data from acute care hospital trusts belonging to the English National Health System (NHS) concerning its development. The results were obtained from a two-stage analysis. First, the entities’ economic efficiency and health/social efficiency (two operational efficiency measures) were evaluated using two data envelopment analysis (DEA) models. Secondly, the results have been regressed with the CEOs’ gender. The results obtained are robust and consistent, revealing that male CEOs have greater performance than female CEOs. This result provides insight into determining features that relate to operational efficiency, which it is of interest to the research and policymakers.
    Date: 2021–02–17

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