nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2021‒06‒14
twelve papers chosen by

  1. Are importing and exporting complements or substitues in an emerging economy? The case of Colombia. By Andrés Mauricio Gómez-Sánchez; Juan A. Máñez; Juan A. Sanchis
  2. WP 05-21 - Business dynamism and productivity growth in Belgium By Michel Dumont
  3. Productivity of Production Factors in Polish Agriculture and in The Selected European Union Countries with Regard to The Common Agricultural Policy Payments By Ściubeł, Anna
  4. Can You Teach an Old Dog New Tricks? New Evidence on the Impact of Tenure on Productivity By Gagliardi, Nicola; Grinza, Elena; Rycx, François
  5. Is Public Equity Deadly? Evidence from Workplace Safety and Productivity Tradeoffs in the Coal Industry By Gilje, Erik P.; Wittry, Michael D.
  6. Patenting in 4IR Technologies and Firm Performance By BENASSI Mario; GRINZA Elena; RENTOCCHINI Francesco; RONDI Laura
  7. Overlooking the online world: Does mismeasurement of the digital economy explain the productivity slowdown? By Alejandra Bellatin; Stephanie Houle
  8. The Effects of Higher Education on Productivity and Innovation (Japanese) By INUI Tomohiko; IKEDA Yuya; KAKINO Shingo
  9. Barriers to Growth-Enhancing Structural Transformation: The Role of Subnational Differences in Intersectoral Productivity Gaps By Paul, Saumik; Raju, Dhushyanth
  10. Plant Capacity Notions: Existence Results at Firm and Industry Levels By Kristiaan Kerstens; Jafar Sadeghi
  11. Soccer Clubs and Diminishing Returns: The Case of Paris Saint-Germain By Vincent (Vincent Peter) Hogan; Patrick Massey
  12. Do energy efficiency improvements reduce energy use? Empirical evidence on the economy-wide rebound effect in Europe and the United States By Berner, Anne; Bruns, Stephan B.; Moneta, Alessio; Stern, David I.

  1. By: Andrés Mauricio Gómez-Sánchez (Universidad del Cauca and Universitat de València); Juan A. Máñez (Universitat de València and ERICES); Juan A. Sanchis (Universitat de València and ERICES)
    Abstract: The aim of this paper is investigating the impact of two firm trading strategies (exporting and importing) on total factor productivity (TFP) and the potential complementarity/substitutability effects of these strategies. To assess these effects, we obtain robust estimates of TFP using a GMM approach that explicitly reckons the ability of firms’ trading experience to affect productivity. We use data for Colombian manufacturing firms from the Annual Manufacturing Survey spanning from 2007-2016. Our estimations results suggest that, regardless of the technological intensity of the industry in which the firm operates, active trading strategies (only exporting, only importing, both importing and exporting) pay positive rewards in terms of productivity. Nevertheless, whilst we find positive synergies (complementary) between exporting and importing for firms in med-high tech sectors, for firms operating in low-tech and med-low tech sectors, importing and exporting appear to be substitutes.
    Keywords: imports, export, productivity, complementarity, substitutability
    JEL: F14 D24
    Date: 2021–05
  2. By: Michel Dumont
    Abstract: This paper considers the evolution in business dynamism and its potential link with productivity growth in Belgium. Statistics on business creation, the exit of enterprises and within-industry reallocation are presented. Data on Belgian firms, covering the period 2003-2017, are used for a decomposition of productivity growth. The paper provides robust indications of the substantial contribution of productivity growth of startups in the early years after entry.
    Keywords: Start-ups, Young firms, Reallocation, Efficiency, Productivity growth
    JEL: D22 D24 L25 L26 M13
    Date: 2021–05–28
  3. By: Ściubeł, Anna
    Abstract: The aim of the paper is to analyze the productivity of production factors of Polish and selected EU farms from 2004 to 2017, taking into account the Common Agricultural Policy (CAP) payments, based on the literature. In the postaccession period, there was a marked increase in the efficiency of production factors on Polish farms. The average land, labor, and capital productivity indices from 2004 to 2017 were EUR 442.89/ha, EUR 4,774.35/AWU, and EUR 0.25/ EUR 1, respectively. In 2014, land productivity increased to EUR 1,591.3/ha and labor productivity to EUR 11,800/AWU, amounting to 68.8% and 28.6% of the EU-28 average, respectively, while capital productivity was higher (EUR 1.41/EUR 1) compared to the EU-28 average (EUR 1.29/EUR 1). The share of CAP payments in the income of the Polish farms in 2014 increased to 49.5%; however, this was still below the EU-28 average (61.1%). Regardless of the fact that the total factor productivity (TFP) remains lower in comparison to other EU countries, the increased efficiency of Polish farms in the post-accession period should be considered as significant.
    Keywords: Agricultural and Food Policy, Productivity Analysis
    Date: 2021
  4. By: Gagliardi, Nicola; Grinza, Elena; Rycx, François
    Abstract: In this paper, we explore the impact of workers’ tenure on firm productivity, using rich longitudinal matched employer-employee data on private Belgian firms. We estimate a production function augmented with a firm-level measure of tenure. We deal with endogeneity, which arises from unobserved firm heterogeneity and reverse causality, by applying a modified version of Ackerberg et al.’s (2015) control function method, which explicitly removes firm fixed effects. Consistently with recent theoretical predictions, we find that tenure exhibits an inverted-U-shaped relationship with respect to productivity. The existence of decreasing marginal returns to tenure is corroborated in our analysis on the tenure composition of the workforce. We also find that the impact of tenure differs widely across workforce and firm dimensions. Tenure is particularly beneficial for productivity in contexts characterized by a certain degree of routineness and lower job complexity. Along the same lines, our findings indicate that tenure exerts stronger (positive) impacts in industrial and high capital-intensive firms, as well as in firms less reliant on knowledge- and ICT-intensive processes.
    Keywords: Tenure,Firm productivity,Semiparametric methods to estimate production functions,Longitudinal matched employer-employee data
    JEL: D24 M59
    Date: 2021
  5. By: Gilje, Erik P. (U of Pennsylvania); Wittry, Michael D. (Ohio State U)
    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 share-holders 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: 2021–04
  6. By: BENASSI Mario; GRINZA Elena; RENTOCCHINI Francesco (European Commission - JRC); RONDI Laura
    Abstract: We investigate whether firm performance is related to the accumulated stock of technological knowledge associated with the Fourth Industrial Revolution (4IR) and, if so, whether the firm’s history in 4IR technology development affects such a relationship. We exploit a rich longitudinal matched patent-firm data set on the population of large firms that filed 4IR patents at the European Patent Office (EPO) between 2009 and 2014, while reconstructing their patent stocks from 1985 onwards. To identify 4IR patents, we use a novel two-step procedure proposed by EPO (2020), based on Cooperative Patent Classification (CPC) codes and on a full-text patent search. Our results show a positive and significant relationship between firms’ stocks of 4IR patents and labour and total factor productivity. We also find that firms with a long history in 4IR patent filings benefit more from the development of 4IR technological capabilities than later applicants. Conversely, we find that firm profitability is not significantly related to the stock of 4IR patents, which suggests that the returns from 4IR technological developments may be slow to be cashed in. Finally, we find that the positive relationship with productivity is stronger for 4IR-related wireless technology and for AI, cognitive computing and big data analytics.
    Keywords: Fourth Industrial Revolution (4IR); patent applications; technology development; firm performance; longitudinal matched patent-firm data; Industry 4.0
    Date: 2021–05
  7. By: Alejandra Bellatin; Stephanie Houle
    Abstract: Since the mid-2000s, labour productivity has slowed down in Canada despite enormous technological advances that were expected to improve it. This note investigates whether mismeasurement of the digital economy can explain this paradox.
    Keywords: Productivity
    JEL: E01 L86 O33 O51
    Date: 2021–05
  8. By: INUI Tomohiko; IKEDA Yuya; KAKINO Shingo
    Abstract: This paper surveys the existing studies on the effects of the accumulation of human capital through higher education on the productivity of workers, and examines the effects of the presence of PhD holders in the firm on its innovation activities. According to past studies measuring the wage premium for postgraduate personnel in Japan, the wage premium for postgraduate graduates is about 20 ~ 30%. On the other hand, according to existing studies in the United States and the United Kingdom, the wage premium for postgraduates is estimated to be about 10 ~ 30%. The difference in the estimated wage premiums between US, UK, and Japan are not large. These past studies suggest the possibility that graduate school education in Japan contributes to worker productivity improvement with the accumulation of human capital to some extent. It is expected that doctoral degree holders in a firm have significant learning capacity and have the effect of enhancing the performance of innovation activities of the firm. The effect of doctoral degree holders on the innovation activity of firms is analyzed by taking into account firm management practice. Our results indicate that firms with PhD holders are more likely to succeed in both product and process innovations in comparison to firms without PhD holders. The magnitudes of these effects are 4.5 percentage points and 3.8 percentage points higher, respectively. It is also shown that the management practice of providing favorable treatment to researchers has a positive effect in realizing innovation in the firm.
    Date: 2021–04
  9. By: Paul, Saumik (Newcastle University); Raju, Dhushyanth (World Bank)
    Abstract: The movement of workers from the farm sector to a more productive nonfarm sector has failed to generate significant gains in labor productivity in recent decades in many developing countries. This paper offers a new perspective into the barriers to growth-enhancing structural transformation, combining structural modeling with enterprise census data from Ghana. We argue that subnational differences in the intersectoral productivity gap between the nonfarm informal and formal sectors constrain the productivity gain from structural transformation. In Ghana, intersectoral productivity gaps among the richer regions are on average three times larger than among the poorer regions. We model the disparity in regional intersectoral productivity gaps as reflecting the disparity in the regional misallocation of labor between the informal and formal sectors and identify misallocation as the output wedge between the informal and formal sectors. Simulations suggest that a more productive nonfarm informal sector reduces the disparity in regional intersectoral productivity gaps and, in turn, increases national productivity and the contribution of structural transformation to national productivity. For example, a 90-percent reduction in the disparity in regional intersectoral productivity gaps raises Ghana's national aggregate productivity by 11.9 percent and the contribution of structural transformation to productivity by 19.7 percent.
    Keywords: structural transformation, misallocation of resources, labor productivity, nonfarm enterprises, subnational regions, informal and formal sectors, Ghana
    JEL: D24 F15 F43 N10 O11 O14 O47
    Date: 2021–06
  10. By: Kristiaan Kerstens (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France, Tel: +33 320545892 (switchboard), Fax: +33 320574855); Jafar Sadeghi (Ivey Business School, Western University, London, Ontario, Canada)
    Abstract: This contribution innovates by investigating the question as to the existence of solutions for the key plant capacity concepts using general nonparametric technologies. Focusing on both short-run and long-run output-oriented, attainable output-oriented, and input-oriented plant capacity notions, we first investigate the existence of solutions at the firm level. Then, for this same range of six plant capacity concepts, we also explore the more difficult question as to the existence of solutions at the industry level.
    Keywords: Data Envelopment Analysis; Nonparametric Technology; Capacity utilization
    JEL: D24
    Date: 2021–05
  11. By: Vincent (Vincent Peter) Hogan; Patrick Massey
    Abstract: Paris Saint-Germain, one of France's top soccer clubs, was bought by Qatar Sports Investments (QSI) in 2011. Since then the club's expenditure has risen precipitously as have its victories. In this paper we ask whether this represents value for money. We find in fact, that the efficiency of PSG did not deteriorate following the takeover. However, while PSG operated close to the production frontier in terms of converting resources to points, it scored vastly more points than was necessary to win the league. We estimate that PSG spent e140m more than was necessary to win the French league in 2016/17. Since 2011, PSG is estimated to have overspent by up to e600m. This expenditure could be thought as being merely the price of creditable performance at a European Level. We show, however, that it has brought less success than would be expected.
    Keywords: Sports Finance; Productivity
    JEL: Z23 D24
    Date: 2021–04
  12. By: Berner, Anne; Bruns, Stephan B.; Moneta, Alessio; Stern, David I.
    Abstract: Improving energy efficiency is often considered to be one of the keys to reducing greenhouse gas emissions. However, efficiency gains also reduce the cost of energy services and may even reduce the price of energy, resulting in energy use rebounding and potential energy use savings being eaten up. There is only limited empirical research quantifying the economy-wide rebound effect that takes the dynamic economic responses to energy efficiency improvements into account. We use a Structural Factor-Augmented Vector Autoregressive model (S-FAVAR) that allows us to track how energy use changes in response to an energy efficiency improvement while accounting for a vast range of potential confounders. Our findings point to economy-wide rebound effects of 78% to 101% after two years in France, Germany, Italy, the U.K., and the U.S. These findings imply that energy efficiency innovations alone may be of limited help in reducing future energy use and emphasize the importance of tackling carbon emissions directly.
    Keywords: Energy efficiency,economy-wide rebound effect,climate change,climate policy,Structural FAVAR,Independent Component Analysis
    Date: 2021

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