nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2021‒05‒24
fourteen papers chosen by

  1. Estimating the Effects of Weather and Climate Change on Agricultural Productivity By C. J. O’Donnell
  2. Intangible Capital and Firm-Level Productivity – Evidence from Germany By Roth, Felix; Sen, Ali; Rammer, Christian
  3. Measuring TFP: The Role of Profits, Adjustment Costs, and Capacity Utilization By Comin, Diego; Quintana Gonzalez, Javier; Schmitz, Tom; Trigari, Antonella
  4. Demographic Change, Technological Advances, and Growth: A Cross-Country Analysis By Park, Cyn-Young; Shin, Kwanho; Kikkawa, Aiko
  5. Is Public Equity Deadly? Evidence from Workplace Safety and Productivity Tradeoffs in the Coal Industry By Erik P. Gilje; Michael D. Wittry
  7. Technology Within and Across Firms By Cirera, Xavier; Comin, Diego; Cruz, Marcio; Lee, Kyungmin
  8. Impact of technological progress on carbon emissions in different country income groups By Chris Belmert Milindi; Roula Inglesi-Lotz
  9. Accounting for Growth in Spain, 1850-2019 By Prados de la Escosura, Leandro; Rosés, Joan R.
  10. Work from Home & Productivity: Evidence from Personnel & Analytics Data on IT Professionals By Gibbs, Michael; Mengel, Friederike; Siemroth, Christoph
  11. Cyclical Worker Flows: Cleansing vs. Sullying By John Haltiwanger; Henry Hyatt; Erika McEntarfer; Matthew Staiger
  12. Productivity Evaluation for Banking System in Developing Countries: DEA Malmquist Productivity Index Based on CCR, BCC, CCR-BCC (A Case Study) By Mitra Khaksar; Mir Mohammad Ali Malakoutian
  13. Multi-Level Parallel Production Networks By Antonio Peyrache; Maria C. A. Silva
  14. The Economics of Diversity: Innovation, Productivity, and the Labour Market By Ozgen, Ceren

  1. By: C. J. O’Donnell (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia)
    Abstract: Explaining changes in agricultural productivity involves explaining changes in output and input quantities. Several economic models can be used for this purpose. This paper considers a model that accounts for weather and output price uncertainty. Changes in productivity are then explained in two steps. First, the relationship between observed outputs, observed inputs and observed weather variables is written in the form of a stochastic production frontier model. Following estimation, the model is used to decompose a proper productivity index into measures of technical progress and environmental change, measures of technical efficiency and scale-and-mix efficiency change, and a measure of change in statistical noise. Second, the relationship between observed input prices and quantities, expected output prices and expected weather variables is written in the form of a system of input demand equations. Following estimation, the system is used to further decompose the measure of scale-and-mix efficiency change into measures of technical progress, input price change, changes in expectations, and changes in allocative efficiency and statistical noise. The methodology is applied to U.S. agricultural data. The effects of weather and climate change on agricultural productivity are found to be small relative to the effects of changes in input prices.
    Date: 2021–01
  2. By: Roth, Felix; Sen, Ali; Rammer, Christian
    Abstract: This paper analyses the impact of intangible capital on firm-level productivity for Germany using panel data from the Community Innovation Survey for the time period 2006 to 2018. Our paper presents three novel results. First, we find a highly significant positive relationship between intangible capital and firm-level productivity with elasticities overall in line with previous findings reported for other large EU economies. Second, our results show that both manufacturing and services are highly intangible-capital intensive, and that intangibles have a greater impact on firm-level productivity in services - particular in the business services sector. Third, our results show that intangible capital investments in German firms are equal to investments in tangible capital since the early 2000s. Overall, the evidence presented in our paper indicates that Germany - in line with other advanced economies - has undergone a structural transition into a knowledge economy in which intangibles act as an important driver of firm-level productivity.
    Keywords: Intangible capital,firm-level productivity,panel data,Germany
    JEL: D24 O30 L22 C33
    Date: 2021
  3. By: Comin, Diego; Quintana Gonzalez, Javier; Schmitz, Tom; Trigari, Antonella
    Abstract: Standard methods for estimating total factor productivity (TFP) growth assume that economic profits are zero and adjustment costs are negligible. Moreover, following the seminal contribution of Basu, Fernald and Kimball (2006), they use changes in hours per worker as a proxy for unobserved changes in capacity utilization. In this paper, we propose a new estimation method that accounts for non-zero profits, structurally estimates adjustment costs, and relies on a utilization proxy from firm surveys. We then compute industry-level and aggregate TFP growth rates for the United States and five European countries, for the period 1995-2016. In the United States, our results suggest that the recent slowdown of TFP growth was more gradual than previously thought. In Europe, we find that TFP was essentially flat during the Great Recession, while standard methods suggest a substantial decrease. These differences are driven by profits in the United States, and by profits and our new utilization proxy in Europe.
    JEL: E01 E30 O30 O40
    Date: 2020–10
  4. By: Park, Cyn-Young (Asian Development Bank); Shin, Kwanho (Korea University); Kikkawa, Aiko (Asian Development Bank)
    Abstract: This paper revisits the impact of population aging on economic growth. In order to understand the impact of population aging on economic growth, it is important to consider the changes in the entire age distribution of demography. Our empirical analysis indicates that a change in age distribution that increases the proportion of older people while reducing the working-age population lowers economic growth. We also investigate the effect of technological advances on the relation between population aging and economic growth, using four plausible proxies of technological advancement: life expectancy, labor productivity, automation, and total factor productivity. We find that increasing life expectancy and labor productivity benefit old age groups as they likely help older age groups contribute more positively to future growth. More automation also helps improve productivity of old age groups but in a different way. When robot density increases, old age groups become less disadvantaged compared to the young. Lastly, technological adoption enhances the growth contribution of productive age groups from the 30s to 60s when one compares low with high total factor productivity scenarios.
    Keywords: demographic change; growth; labor productivity; life expectancy; robotics
    JEL: J11 J24 O33 O47 O57
    Date: 2020–07–10
  5. By: Erik P. Gilje; Michael D. Wittry
    Abstract: We study how ownership structure, in particular public listing status, affects workplace safety and productivity tradeoffs. Theory offers competing hypotheses on how listing related frictions affect these tradeoffs. We exploit detailed asset-level data in the U.S. coal industry and find that workplace safety deteriorates dramatically under public firm ownership, primarily in mines that experience the largest productivity increases. We find evidence consistent with information asymmetry between managers and shareholders of public firms, and ties of private firm ownership with local communities being first-order drivers of workplace safety and productivity tradeoffs.
    JEL: G30 G32 G34 J24 J38
    Date: 2021–05
  6. By: Yan Meng (University of Melbourne); Christopher F. Parameter (Miami Herbert Business School, University of Miami); Valentin Zelenyuk (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia)
    Abstract: Understanding the drivers of productivity remains one of the most sought after phenomena in economics. The ability to create produce more from less resources is undoubtedly appealing. Using recently updated Penn World Table data, we investigate to what degree previous results using a popular productivity decomposition are maintained. We find that, contrary to conclusions from earlier work, technical efficiency (catching up) played a more pronounced role in the global increase in productivity over the 1965-1990 period. We also find a larger effect for technical change than earlier work and a far lesser role for capital deepening. This suite of results augurs the coming information age that placed less weight on physical capital to createand sustain wealth. Taken together our findings here suggest that as data collection, its quality and evaluation methods evolve, so too will our understanding of productivity dynamics.
    Date: 2021–05
  7. By: Cirera, Xavier; Comin, Diego; Cruz, Marcio; Lee, Kyungmin
    Abstract: We collect data on the sophistication of technologies used at the business function level for a representative sample of firms from 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 at the firm level that we name the technology curve. We uncover significant heterogeneity in the slope of technology curves across business functions, a finding consistent with non-homotheticities in firm-level technology aggregators. Firm-productivity is positively associated to both the within-firm variance and 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 vs. non-agricultural gap in cross-country differences in firm productivity.
    Date: 2020–11
  8. By: Chris Belmert Milindi; Roula Inglesi-Lotz
    Abstract: This study examines the complex relationship between carbon emissions and technological progress in a sample of 60 countries, divided into four categories based on their per capita income between the periods of 1989-2018. For robustness purposes and due to the broad definition of technology, we use six different proxies to represent technology; namely: Information and telecommunication technology (ICT); patents; public R&D expenditure; total factor of productivity (TFP); and a number of science and technology publications. After applying the fixed-effect method with Driscoll and Kraay standard errors, for the full sample, the results show that the ICT variables are a good instrument for carbon abatement, while R&D expenditure and patents do not have a clear impact on carbon emissions, TFP increases carbon emissions, and science and technology publications are negatively related to carbon emissions. The impact of the indicators on the various income levels groups of countries vary which has significant policy implications.
    Keywords: Technological progress, Income groups, Rebound Effect, fixed effect methodology with Driscoll, and Kraay standards errors
    JEL: O30 O32 C23 Q56
    Date: 2021–03
  9. By: Prados de la Escosura, Leandro; Rosés, Joan R.
    Abstract: The current productivity slowdown has stimulated research on the causes of growth. We investigate here the proximate determinants of long-term growth in Spain. Over the last 170 years output per hour worked raised nearly 24-fold dominating GDP growth, while hours worked per person shrank by one-fourth and population trebled. Half of labour productivity growth resulted from capital deepening, one-third from total factor productivity, and labour quality contributed the rest. In phases of acceleration (the 1920s and 1954-85), TFP was labour productivity's main driver complemented by capital deepening. Since Spain's accession to the European Union (1985), labour productivity has sharply decelerated as capital deepening slowed down and TFP stagnated. Up to the Global Financial Crisis (2008) GDP growth mainly resulted from an increase in hours worked per person and, to a less extent, from sluggish labour productivity coming mostly from weak capital deepening. Institutional constraints help explain the labour productivity slowdown.
    Keywords: Capital Deepening; growth; labour productivity; Labour quality; Spain; total factor productivity
    JEL: D24 E01 N13 N14 O47
    Date: 2020–10
  10. By: Gibbs, Michael (University of Chicago); Mengel, Friederike (University of Essex); Siemroth, Christoph (University of Mannheim)
    Abstract: Using personnel and analytics data from over 10,000 skilled professionals at a large Asian IT services company, we compare productivity before and during the work from home [WFH] period of the Covid-19 pandemic. Total hours worked increased by roughly 30%, including a rise of 18% in working after normal business hours. Average output did not significantly change. Therefore, productivity fell by about 20%. Time spent on coordination activities and meetings increased, but uninterrupted work hours shrank considerably. Employees also spent less time networking, and received less coaching and 1:1 meetings with supervisors. These findings suggest that communication and coordination costs increased substantially during WFH, and constituted an important source of the decline in productivity. Employees with children living at home increased hours worked more than those without children at home, and suffered a bigger decline in productivity than those without children.
    Keywords: collaboration, COVID-19, pandemic, productivity, remote working, telecommuting, working from home, work hours, work time
    JEL: D2 M5
    Date: 2021–04
  11. By: John Haltiwanger; Henry Hyatt; Erika McEntarfer; Matthew Staiger
    Abstract: Do recessions speed up or impede productivity-enhancing reallocation? To investigate this question, we use U.S. linked employer-employee data to examine how worker flows contribute to productivity growth over the business cycle. We find that in expansions high-productivity firms grow faster primarily by hiring workers away from lower-productivity firms. The rate at which job-to-job flows move workers up the productivity ladder is highly procyclical. Productivity growth slows during recessions when this job ladder collapses. In contrast, flows into nonemployment from low productivity firms disproportionately increase in recessions, which leads to an increase in productivity growth. We thus find evidence of both sullying and cleansing effects of recessions, but the timing of these effects differs. The cleansing effect dominates early in downturns but the sullying effect lingers well into the economic recovery.
    Date: 2021–05
  12. By: Mitra Khaksar (EMU - Eastern Mediterranean University); Mir Mohammad Ali Malakoutian (UWE Bristol - University of the West of England [Bristol])
    Abstract: The main goal of this paper is to evaluate bank productivity over 2015-2019 with Data Envelopment Analysis (DEA) for 30 banks from eight developing countries. The primary purpose of this study is to compare the productivities with Malmquist Productivity Index (MPI). Applying MPI can be beneficial for managers to expand their comparison and evaluation. To find the superior model, we use Charnes, Cooper and Rhodes model (CCR), or Banker, Charnes and Cooper model (BBC), combine the two aforementioned models starting with CCR model (CCR-BCC). The results indicate that the CCR-BCC model has the most productive effect during all periods compare with other suggested models in MPI. Meanwhile, BCC and CCR models are in the second and third places, respectively. We consider input-oriented for the suggested models This study overcomes with some data and methodology issues in measuring the productivity of developing countries banks and highlights the importance of inspiring increased productivity through the banking industry comparing four suggested models and the new results. The dataset was obtained from BankFocus-Bureau van Dijk database. From each country we choose the three or four biggest banks based on the total assets.
    Keywords: Data envelopment analysis,Malmquist productivity index,Banking system,CCR-BCC
    Date: 2020
  13. By: Antonio Peyrache (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia); Maria C. A. Silva (CEGE - Católica Porto Business School,)
    Abstract: Network Data Envelopment Analysis (DEA) has become a largely researched topic in the DEA literature. In this paper we consider one of the simplest network models: Parallel Network DEA models. We briefly review a large body of literature that relates to these network models. Then we proceed to discuss existing models and point out some of their pitfalls. Finally, we propose an approach that attempts to solve these pitfalls, recognising that when one computes a decision making unit (DMU) efficiency score and want to decompose it into the divisional/process efficiencies there is a component of allocative inefficiency. We develop our models at three levels of aggregation: the sub-unit (production division/process), the DMU (firm) and the industry. For each level we measure the inefficiency using the directional distance function and we relate the different levels to each other by proposing a decomposition into exhaustive and mutually exclusive components. We illustrate the application of our models to the case of Portuguese hospitals and we also propose avenues for future research, since most of the topics addressed in this paper are not only related to Parallel network models but to general network structures.
    Keywords: Data Envelopment Analysis; Multi-Level Networks; Parallel Networks; Directional Distance Function; Efficiency.
    Date: 2021–02
  14. By: Ozgen, Ceren (University of Birmingham)
    Abstract: The empirical evidence on the economic impacts of diversity is mixed. Many studies in the literature present context dependent and data driven results which are challenging to reconcile with each other. This paper offers a systematic synthesis of the empirical findings on the economic impacts of diversity on innovation, productivity, and the labour market. It presents a structured framework which takes the spatial scale of the analysis in the papers as a reference to understand the inconsistency of some previous predictions and the varying magnitudes of the diversity impact. The empirical findings reconcile more meaningfully when diversity effects are documented discretely at the regional, firm and individual levels. The paper further sets out an agenda for future research and links the findings for policy relevance.
    Keywords: innovation, cultural diversity, migration, knowledge production function
    JEL: J24 J15 F22 O15
    Date: 2021–04

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