nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2021‒03‒22
thirteen papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Potential Growth in Turkey: Sources and Trends By Orhun Sevinc; Ufuk Demiroglu; Emre Cakir; E. Meltem Bastan
  2. Cross-Economy Dynamics in Energy Productivity: Evidence from 47 Economies over the Period 2000–2015 By Liu, Yang; Zhong, Sheng
  3. Decomposing total factor productivity while treating for misspecification By Emmanuel Mamatzakis; Efthymios Tsionas
  4. Labour Productivity Growth Determinants in the Manufacturing Sector in the Baltic States By Toma Lankauskiene
  5. What Makes a Productive Ph.D. Student? By Alberto Corsini; Michele Pezzoni; Fabiana Visentin
  6. The Impact of Business Environment Reforms on Firms’ Performance in Transition Economies By Berulava, George; Gogokhia, Teimuraz
  7. The Productivity Puzzle – A Critical Assessment and an Outlook on the COVID-19 Crisis By Roth, Felix
  8. A Note on the Zero-Sum Gains Data Envelopment Analysis Model By Thanasis Bouzidis; Giannis Karagiannis
  9. Teacher Characteristics and Student Performance: Evidence from Random Teacher-Student Assignments in China By Huang, Wei; Li, Teng; Pan, Yinghao; Ren, Jinyang
  10. Employee Training and Firm Performance: Evidence from ESF Grant Applications By Martins, Pedro S.
  11. The role of innovation and human capital for the productivity of industries By Emile Cammeraat; Lea Samek; Mariagrazia Squicciarini
  12. Deep Dynamics By Glenn Mickelsson; Karolina Stadin; Nils Gottfries
  13. American business cycles 1889-1913: An accounting approach By Dou Jiang; Mark Weder

  1. By: Orhun Sevinc; Ufuk Demiroglu; Emre Cakir; E. Meltem Bastan
    Abstract: This paper estimates potential growth in Turkey using a production function estimation approach. Our approach aims to measure the inputs of production in the most detailed fashion that is possible and empirically addresses concepts of sustainable potential growth for Turkey. While developing measures of the sources of potential growth, we provide a thorough discussion of the estimated trends in labor force participation, capital growth by asset type, and total factor productivity since the mid-2000s. Our results suggest that the key driver of potential growth has increasingly been capital accumulation. The declining trend in the positive TFP growth stands out as the key area of improvement for potential growth.
    Keywords: Potential growth, Labor force participation, Productivity, Capital accumulation
    JEL: E1 J21 O4
    Date: 2021
  2. By: Liu, Yang (Asian Development Bank Institute); Zhong, Sheng (Asian Development Bank Institute)
    Abstract: We investigate the long-run cross-economy dynamics in energy productivity across the world. We construct a data set comprising value-added and energy use data on 18 productive sectors in 47 economies over the period 2000–2015. First, we analyze the cross-economy distribution of energy productivity. Compared with 2000, this distribution shifted more toward the world average level in 2015. By using an index decomposition approach, we disentangle energy efficiency effect and economic structure effect as key determinants of the overall energy productivity improvement. Our results show that energy productivity progress is to a large extent driven by technological change but offset by economic structural change. Second, we explore the long-run distribution of energy productivity. Diverse patterns of energy productivity changes across these economies contradict the implicit assumption of standard convergence analysis. To address this issue, we adopt the Markov chain transition matrix. In a long-run steady state, around 64% of sample economies upgrade toward the upper end of the whole distribution, with their energy productivity performing better than the world average. Around 18% of sample economies remain at a level lower than the world average. The results suggest the persistent gap in energy efficiency across economies.
    Keywords: energy productivity; decomposition; transition matrix; convergence
    JEL: O13 Q01 Q56
    Date: 2021–01–29
  3. By: Emmanuel Mamatzakis (Department of Management, Birkbeck, University of London, UK); Efthymios Tsionas (Economic Department, Lancaster University Management School, UK)
    Abstract: Decomposing firm performance has been challenging for some time. Yet the importance of accurately measuring performance is unequivocal. We propose a flexible functional of total factor productivity (TFP) that measures firm performance and treats misspecification. We argue that measuring bank productivity at global level, which is provided by our model based on bank micro-foundations, is better suited than other measures. Our results suggest that there is not much convergence in TFP across the world, though the technology has positively contributed to bank TFP growth. However, nonperforming loans have had the opposite effect. Furthermore, we show that bank risk-taking and raising capital by equity are negatively related to TFP growth; instead, liquidity has a positive impact.
    Date: 2020–03
  4. By: Toma Lankauskiene (Vilnius Tech University, Lithuania)
    Abstract: This article seeks to derive the determinants of labour productivity growth in the Baltic states’ manufacturing sector and comparatively analyse the results. To achieve this, first, the growth rate of value added and its main contributors, namely hours worked and the growth rate of labour productivity, have been determined. Second, the main contributors to the growth rate of labour productivity, namely the contributions of labour composition, capital, and total factor productivity (TFP), have been established. Last, following the results, the relevant comparative analysis of newly derived indicators in the manufacturing sector has been accomplished, and conclusions have been presented. This paper used the growth accounting research methodology. Research limitations: the research was performed through the primary sources of growth approach, that is, only those determinants that remain important are incorporated in the model. Practical implications: the newly derived contributors to the growth rate of labour productivity reveal actual growth sources targeted to derive conclusions. The latter could be relevant for policy recommendations at both the national (e. g. guidelines for governmental policies for the selected economies) and the international (e.g., guidelines for EU policy and acts) levels. Originality and value: the novelty of the present study lies in the fact that the growth accounting method had not previously been applied in the manufacturing sector for the Baltic states.
    Keywords: growth rate, value-added, labour productivity, hours worked, labour composition, capital
    Date: 2021–01
  5. By: Alberto Corsini (Université Côte d'Azur, France; CNRS, GREDEG); Michele Pezzoni (Université Côte d'Azur, France; CNRS, GREDEG); Fabiana Visentin (Maastricht University; UNU-MERIT)
    Abstract: This paper investigates the impact of the social environment to which a Ph.D. student is exposed on her scientific productivity during the training period. Vertical and horizontal relationships depict the social environment. Vertical relationships are those supervisor-student, while horizontal relationships are those student-peers. We characterize these relationships by assessing how the supervisor's and peers' biographic and academic characteristics relate to the student's productivity as measured by the publication quantity, quality, and scientific network size. Unique to our study, we cover the entire student population of a European country for all the STEM fields. Specifically, we analyze the productivity of 77,143 students who graduated in France between 2000 and 2014. We find that having a female supervisor is associated with a higher student's productivity as well as being supervised by a mid-career scientist and having a supervisor with a high academic reputation. The supervisor's fundraising ability benefits only one specific dimension of the student's productivity, i.e., the student's work quality. Interestingly, the supervisor's mentorship experience negatively associates with student's productivity. Having many peers negatively associates with the student's productivity, especially if peers are senior students. Having female peers positively correlates with the student's productivity, while peers' academic status shows mixed effects according to the productivity dimension considered. We find results heterogeneity when breaking down our sample by field of research.
    Keywords: French Ph.D. students, Productivity determinants, Social environment, Supervisor, Peers
    JEL: J24 O30
    Date: 2021–03
  6. By: Berulava, George; Gogokhia, Teimuraz
    Abstract: The study investigates the impact of business environment on export performance of individual firms in transition economies. For these goals, the study utilizes the firm-level data from the Business Environment and Enterprise Performance Survey (BEEPS V round) across 28 transition economies. Applying the modified CDM model the paper examines the structural link between the business environment reforms, firm R&D, innovation, labor productivity, and export performance. The model was estimated sequentially, step-by-step. The estimates of the structural model, generally, proved our hypothesis about the impact of business environment reforms on the relationships between R&D investments, innovation, labor productivity and export performance. This study also supports the early findings that R&D is an important determinant of innovation, that innovation is a driver of labor productivity and that labor productivity, in turn, substantially increases the probability of firm’s participation at export markets.
    Keywords: Business environment reforms, R&D, Innovation, Productivity, Export, Transition economies
    JEL: D22 O12 O31 O38 P31
    Date: 2021
  7. By: Roth, Felix
    Abstract: This paper assesses the productivity puzzle critically and gives an outlook on the COVID-19 crisis. It offers two main conclusions. First, it posits that a large fraction of the productivity puzzle can be solved by incorporating intangible capital into the asset boundary of the national accounts. Thus, the productivity puzzle is largely explained as a consequence of fundamental structural changes that are underway, transforming industrial economies into knowledge economies. Secondly, the contribution foresees a post-COVID-19 scenario that will likely lead to a pronounced increase in labour productivity growth. This depends, however, on whether the current push for digitization will be backed by actual investments into digitization and the necessary complementary investments in (business and public) intangible capital.
    Keywords: productivity puzzle,intangible capital,labour productivity growth,structural change,COVID-19 crisis,re-measurement of GDP
    JEL: E22 F45 O32 O34 O47 O52
    Date: 2021
  8. By: Thanasis Bouzidis (Department of Economics, University of Macedonia); Giannis Karagiannis (Department of Economics, University of Macedonia)
    Abstract: In the case of the proportional output reduction strategy with a single output, the Variable-Returns-to-Scale (VRS) Zero-Sum Gains Data Envelopment Analysis (ZSG-DEA) efficiency scores can be obtained from the VRS conventional DEA efficiency scores by means of the Target’s Assessment Theorem (TAT). Using TAT as a departure point, two relations for computing the ZSG-DEA efficiency scores appear in the literature. Our objective in this note is to compare, contrast and challenge them on both theoretical and empirical grounds. For the latter, three different data sets are used.
    Keywords: Output Interdependency; ZSG-DEA Efficiency; Conventional DEA Efficiency.
    JEL: D23
    Date: 2021–03
  9. By: Huang, Wei (National University of Singapore); Li, Teng (National University of Singapore); Pan, Yinghao (National University of Singapore); Ren, Jinyang (Jiangxi University of Finance and Economics)
    Abstract: This paper investigates the impacts of teacher characteristics on student performance using a nationally representative and randomly assigned teacher-student sample in China. We find that having a more experienced or female homeroom teacher (HRT) with additional classroom management duties significantly improves students' test scores and cognitive and noncognitive abilities. In contrast, these effects are not observed for subject teachers who are responsible only for teaching. More experienced or female HRTs are also associated with a better classroom environment, more self-motivated students, more parental involvement, and higher parental expectations. These mechanisms explain 10-25 percent of HRT effects on test scores and cognitive ability and 50-60 percent of HRT effects on noncognitive ability. Our findings highlight the importance of teacher management skills in education production.
    Keywords: teacher value-added, education production function, student performance
    JEL: I21 J24
    Date: 2021–03
  10. By: Martins, Pedro S. (Queen Mary, University of London)
    Abstract: As work changes more quickly, firm-provided training may become more relevant. However, there is little causal evidence about the effects of training on firms. This paper studies a large training grants programme in Portugal, supported by the European Social Fund, contrasting firms that received the grants and firms that also applied but were unsuccessful. Combining several rich data sets, we compare a large number of potential outcomes of these firms, while following them over several years both before and after the grant decision. Our difference-in-differences models estimate significant positive effects on take up (training hours and expenditure), with limited deadweight; and that such additional training led to increased sales, value added, employment, productivity, and exports. These effects tend to be of at least 5% and, in some cases, 10% or more, and are robust in multiple dimensions.
    Keywords: training subsidies, productivity, programme evaluation
    JEL: J24 H43 M53
    Date: 2021–02
  11. By: Emile Cammeraat (OECD); Lea Samek (OECD); Mariagrazia Squicciarini (OECD)
    Abstract: This paper sheds light on the relationship between innovation, human capital endowment and upgrading, organisational capital (OC) and labour productivity. In addition to assessing correlations, it uses a Heckman selection model to address causal links and to account for the ways in which skills and investment in R&D affect the probability of innovating. The analysis finds that innovative output, the proportion of OC-related workers, investment in training (especially in informal training) and physical capital intensity are positively and significantly related to productivity. In most estimates ICT skills, cognitive skills and the presence of highly skilled workers in an industry also emerge as having a significant and positive relationship with productivity. ICT skills further appear to indirectly shape productivity, through a positive relationship with innovation.
    Keywords: Human Capital, ICT, Innovation, Labour Productivity, Organisational Capital, Patent, R&D, Skills, STEM, Training
    Date: 2021–03–16
  12. By: Glenn Mickelsson; Karolina Stadin; Nils Gottfries
    Abstract: How do firms adjust their output, inventories, employment and capital in response to demandsideshocks? To understand this, we estimate a reduced-form model using firm-level panel dataand we construct a theoretical model that can match the estimated impulse-response functions.A combination of convex adjustment costs and implementation lags explains input adjustmentvery well. Although inputs adjust slowly, production responds quickly to the demand shock andthis adjustment is explained by a combination of increasing returns and increased utilization ofthe production factors. To avoid stock-outs, firms increase their inventories when demandincreases.
    Keywords: production function, productivity, Solow residual, labor hoarding, effort, organizational capital, capacity, returns to scale, markup, inventory investment
    JEL: E22 E23 E24 E32
    Date: 2021
  13. By: Dou Jiang; Mark Weder
    Abstract: This paper quantitatively investigates the Depression of the 1890s and the 1907 recession in the United States. Business Cycle Accounting decomposes economic fluctuations into their contributing factors. The results suggest that both the 1890s and the 1907 recessions were primarily caused by factors that affect the efficiency wedge, i.e. slumps in the economy’s factor productivity. Distortions to the labor wedge played a less important role. Models with financial market frictions that translate into the efficiency wedge are the most promising candidates for explaining the recessionary episodes.
    Keywords: Business cycles, Depression of the 1890s, Recession of 1907
    JEL: E32 E44 N11
    Date: 2021–01

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