nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2021‒07‒19
thirteen papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Dynamics of farm performance and policy impacts: Case studies: Case Studies By Johannes Sauer; Will Chancellor; Phillip Mennig; Jesús Antón
  2. Dynamics of farm performance and policy impacts: Main findings By Jesús Antón; Johannes Sauer
  3. Foreign direct investment, prices and efficiency: Evidence from India By Ali, Nesma; Stiebale, Joel
  4. The impact of Covid-19 on productivity By Nicholas Bloom; Philip Bunn; Paul Mizen; Pawel Smietanka; Gregory Thwaites
  5. Climate Change Impacts on Yield and Financial Performance of Agro-Plantation Companies in Malaysia By Alam, Md. Mahmudul; Ibrahim, Yusnidah Bt; Mia, Shahin
  6. Servitization Across Countries and Sectors: Evidence from World Input-Output Data By Klaus S. Friesenbichler; Agnes Kügler
  7. Estimation of Cost Minimization of Garments Sector by Cobb-Douglas Production Function: Bangladesh Perspective By Mohajan, Haradhan
  8. Management Practices Drive Productivity – But Not Without Human Capital By Ohlsbom, Roope
  9. Digging into Environmental Productivity: Is It All about Technology? By Filippo Belloc; Edilio Valentini
  10. Capital Reallocation and Firm-Level Productivity Under Political Uncertainty By Tut, Daniel; Cao, Melanie
  11. Nexus of Financial Inclusion and Economic Growth: Benchmarking the Performance of Indian States By Yadava, Anup Kumar; Singh, Bhanu Pratap; Yadav, Vishal
  12. Online Business Capabilities and Online Business Performance in the Malaysian Fashion Industry By Teo Shao Zhen
  13. Technical Efficiency and Public Policies in Agriculture: An Analysis for the Eastern Amazon Region By Juliana de Sales Silva

  1. By: Johannes Sauer (Technical University of Munich); Will Chancellor (Australian Bureau of Agricultural and Resource Economics and Sciences); Phillip Mennig (Technical University of Munich); Jesús Antón (OECD)
    Abstract: This paper provides detailed farm level data evidence on the dynamics of farm performance from case studies covering crop farms in Australia, France, Italy and the United Kingdom (England and Wales), and dairy farms in the Czech Republic, Denmark and Norway, with different recent sample periods of five to thirty years. An increase in productivity over time is common to all countries and most crop farm classes, but productivity dynamics vary significantly. In Australia, strong productivity growth among the most productive crop farms has led to an increase in the gap between the highest and lowest performing farms; whereas in France, Italy and the United Kingdom, productivity growth was weak among the most productive crop farms and the lowest performing farms closed the productivity gap. Productivity also increased among dairy farms, with an increasing gap between the most and the least productive farm classes in the three sample countries. The impact of policy changes on performance dynamics is analysed for decoupled payments in France and England, and dairy payments in the Czech Republic. The main findings across countries and policy implications are discussed in OECD Food, Agriculture and Fisheries Paper N°164.
    Keywords: Agricultural policy, Agriculture, Decoupling, Drivers of performance, Environmental sustainability, Farm structure, Innovation, Productivity, Technical change
    JEL: D24 O31 O33 Q12 Q18
    Date: 2021–07–13
  2. By: Jesús Antón (OECD); Johannes Sauer (Technical University of Munich)
    Abstract: Increasing productivity at farm level is a key policy objective across most countries and fundamental to the overall performance of agricultural and food systems. This paper applies dynamic statistical methods to farm level data in order to identify the determinants of farm performance over time, in terms of productivity and measures of local sustainability. The analysis sheds light on the effects of policies on productivity, and the links between productivity and sustainability outcomes. It draws on key findings from seven case studies: crop farms in Australia, France, Italy and the United Kingdom (England and Wales); and dairy farms in the Czech Republic, Denmark and Norway, with different sample periods, from the most recent three decades to the last five years. A key finding is that policy changes increasing the degree of decoupling of payments have a positive impact on productivity. Furthermore, with the right incentives, productivity growth can be more locally sustainable insofar as farms can produce more output with less inputs that harm the environment. The detailed background work on the seven samples of crops and dairy farms in the above countries is available in OECD Food, Agriculture and Fisheries Paper N°165.
    Keywords: Agricultural policy, Agriculture, Decoupling, Drivers of performance, Environmental sustainability, Farm structure, Innovation, Productivity, Technical change
    JEL: D24 O31 O33 Q12 Q18
    Date: 2021–07–13
  3. By: Ali, Nesma; Stiebale, Joel
    Abstract: This paper uses a rich panel data set of Indian manufacturing firms to analyze the effects of foreign direct investment (FDI) on various outcomes of domestic firms. We apply recent methodological advances in the estimation of production functions together with detailed product-level information on prices and quantities to estimate physical productivity, markups and marginal costs. Our results indicate the importance of price adjustments which stem from competitive pressure and a pass-through of cost savings to consumers. In line with the previous literature, we find little evidence for spillovers based on commonly used measures of revenue productivity. In contrast, we measure sizable efficiency gains using measures that are not affected by pricing heterogeneity, such as marginal costs and physical productivity. Exploiting exogenous variation from India's FDI liberalization, we provide evidence that the relationship between exposure to FDI and efficiency is causal. Our results suggest that knowledge spills over across product categories within industries and mainly benefits producers of high-quality products. We also provide evidence that FDI spillovers are stronger for joint ventures and when foreign investors enter via acquisitions.
    Keywords: Foreign Direct Investment,Spillovers,Productivity,Marginal Costs,Prices,Markups,Multi-Product Firms
    JEL: F61 F23 G34 L25 D22 D24
    Date: 2021
  4. By: Nicholas Bloom; Philip Bunn; Paul Mizen; Pawel Smietanka; Gregory Thwaites
    Abstract: We analyze the impact of Covid-19 on productivity in the United Kingdom using data derived from a large monthly firm panel survey. Our estimates suggest that Covid-19 will reduce TFP in the private sector by up to 5% in 2020 Q4, falling back to a 1% reduction in the medium term. Firms anticipate a large reduction in ‘within-firm’ productivity, primarily because measures to contain Covid-19 are expected to increase intermediate costs. The negative ‘within-firm’ effect is partially offset by a positive ‘between-firm’ effect as low productivity sectors, and the least productive firms among them, are disproportionately affected by Covid-19 and consequently make a smaller contribution to the economy. In the longer run, productivity growth is likely to be reduced by diminished R&D expenditure and diverted senior management time spent on dealing with the pandemic.
    Keywords: covid-19; pandemic; productivity
    Date: 2020
  5. By: Alam, Md. Mahmudul (Universiti Utara Malaysia); Ibrahim, Yusnidah Bt; Mia, Shahin
    Abstract: In Malaysia, there is a declining trend in agricultural productivity and crop yields due to various climate events in the recent years. Therefore, this study aims to examine the impacts of climate change, especially El Nino and flood, on the financial performance of Malaysian agro and plantation firms. The study used a panel data set on 33 Malaysian agro and plantation firms listed in Bursa Malaysia for the period of 2003 to 2016. A panel of regression models including GMM, Pooled OLS, Random Effect and Fixed Effect were used to analyze the data. The results show that both the El Nino and flood have significant negative impact on the firms’ financial performance as measured by ROA and ROE. The findings indicate that climate change results in reduction of agricultural production which reduces revenue and consequently the profit of the agro and plantation firms. The study findings might help the firm managers as well as policy makers to take into consideration the environmental factors that affect the overall financial health of the firms and take appropriate adaptation and mitigation policies to climate change at firm level and macro level in the country.
    Date: 2020–05–31
  6. By: Klaus S. Friesenbichler; Agnes Kügler
    Abstract: This paper uses the supply tables underlying WIOT data to explore the provision of services by manufacturing. The service shares differ substantially across countries and sectors, while they remain largely stable over time. Findings from a latent class analysis reveal that servitization in-crease with labour productivity. The service intensities in the sectoral production mix of broadly defined manufacturing sectors are lower in countries with higher manufacturing shares. This holds for both catching-up and developed economies. Yet, servitization is largely unrelated to productivity and employment growth. We therefore argue that the degree of servitization is contingent on and an attribute of the respective economic model in which a sector operates.
    Keywords: Servitiziation, employment, productivity, latent class analysis, WIOD
    Date: 2021–06–22
  7. By: Mohajan, Haradhan
    Abstract: The Cobb-Douglas production function in the field of economics has a long history. In mathematical economics, it is used to find the functional relationship between the economic inputs and potential outputs. This study applies the Cobb-Douglas production function to predict the cost minimization policies of a running garments industry of Bangladesh. In the study the effects of the variation rate of capital, labor and other inputs with returns to scale in the garments industry of Bangladesh are examined. In multivariable calculus, the method of Lagrange multiplier is a very useful and powerful technique. In this study interpretation of Lagrange multiplier is given to predict the cost minimization policy using Cobb-Douglas production function. An attempt has been taken here to show the production of garments in minimum cost by using statistical analysis.
    Keywords: Production function, Cobb-Douglas model, cost minimization, returns to scale
    JEL: C3 C5 C61
    Date: 2021–02–11
  8. By: Ohlsbom, Roope
    Abstract: Abstract Data collected with the Finnish Management and Organizational Practices Survey (FMOP) is used to study the association between management practices and firm productivity, and to examine whether human capital intensity acts as a moderator variable for this relationship. A comparison of how well different models predict productivity from management practices and human capital reveals a linear two-way interaction between the education of managers and management practices. We find evidence that the marginal benefit of adopting more structured management practices is different for establishments with different levels of managerial human capital. Testing and accounting for this interaction is important for reliable estimation of the management-productivity relationship. Accounting for the interaction, a 10 percent increase in the FMOP management score is found to be associated with an average of 7.1 percent higher labour productivity. Management practices can account for more than 24 percent of the observed productivity dispersion. This is close to as much as is accounted for by information and communication technologies and more than by research and development and human capital.
    Keywords: Management practices, Management survey, FMOP, Productivity, Human capital, Education
    JEL: D22 J24 L25 L60 M11 M50
    Date: 2021–07–06
  9. By: Filippo Belloc; Edilio Valentini
    Abstract: We propose a mixture model approach to decompose environmental productivity into a managerial and a technological dimension, and to identify locally optimal technologies. For a large sample of plants covered by the EU Emission Trading System, we find that the average output gains, emissions being equal, that plants could reach by adopting the locally optimal technology and the best managerial practices available in the sector are 162% and 53% respectively, with significant cross-plant and cross-sector differentials. This data driven decomposition delivers important policy insights, as it helps predicting larger reductions in emission intensity from exible policies than from one-size-fits-all technology-based standards
    Keywords: Environmental productivity, Emission intensity, Environmental technology, Environmental management
    JEL: D24 L60 Q54 Q55
    Date: 2021–06
  10. By: Tut, Daniel; Cao, Melanie
    Abstract: Does policy uncertainty affect productivity? Policy uncertainty creates delays as firms await new information about prices, costs and other market conditions before committing resources. Such delays can have real consequences on firms’ productivity and corporate decisions. First, we find that economic policy uncertainty has a negative impact on firm-level productivity. Second, debt magnifies the adverse effects of policy uncertainty on productivity, but access to external financing during periods of significant policy uncertainty shocks has a positive impact on firm� level productivity. Third, Policy uncertainty is positively related to cash holdings but this effect is mostly driven by highly productive firms and by firms with higher levels of irreversible investments since these firms face higher opportunity costs in future states. The three findings are robust to various specifications and provide an affirmative answer to the opening question.
    Keywords: Policy Uncertainty, Capital Reallocation, TFP, Leverage, Cash, Business Cycles
    JEL: G0 G2 G28 G3 G31 G32 G38
    Date: 2021–06–28
  11. By: Yadava, Anup Kumar; Singh, Bhanu Pratap; Yadav, Vishal
    Abstract: The study evaluates and benchmarks the performance of Indian states considering the proposed multidimensional financial inclusion index (FII) as input and economic growth as an output variable. The HDI methodology of UNDP is adopted in the construction of supply and demand side FII for 27 Indian states for the period 2004 to 2017. The output-oriented DEA models are used in which supply and demand FIIs are used as an input and real gross state domestic product as an output to measure the technical efficiency of the states. The major findings of the study suggest Maharashtra performs at the frontier and benchmarks for all other states in both CRS and VRS DEA models which is consistent with FII indices of the states. Therefore, structural reforms are warranted in the policy framework to improve financial services in poor and low performing states to spur economic development.
    Keywords: Financial inclusion; Multidimensional Index; Data Envelopment Analysis, Benchmarking, Economic Growth
    JEL: G0 O10 O40
    Date: 2021
  12. By: Teo Shao Zhen (School of Management, Universiti Sains Malaysia, Malaysia Author-2-Name: Siti Hasnah Hassan Author-2-Workplace-Name: School of Management, Universiti Sains Malaysia, Penang, Malaysia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - The digital economy is believed to be one of Malaysia's largest sectors as online businesses are expected to exhibit an increase of 10% in the near future. This factor eventually prompted subsequent studies on online business models. This study aims to discover the types of online business capabilities that could enhance the firm competitiveness of online business in the Malaysian fashion industry. Methodology/Technique - A questionnaire was developed and distributed by hand to a number of Malaysian online business owners in the fashion industry. The data was analysed using SPSS version 26 and SmartPLS 3.0. Finding - The findings indicated that digital marketing capability and CRM capability were significantly correlated to firm competitiveness, which in turn, also showed a significant and positive relationship with online business performance. Nevertheless, IT capability was an insignificant factor of firm competitiveness. Novelty - This study concluded the importance of CRM capability and digital marketing capability for online business owners to enhance firm competitiveness. The results also implied the importance of firm competitiveness for online businesses to perform in Malaysian fashion industry. Type of Paper - Empirical.
    Keywords: Online Business Performance, Online Business Capabilities, Digital Marketing Capability, CRM Capability, IT Capability, Firm Competitiveness, Fashion Industry
    JEL: L20 L25
    Date: 2021–06–30
  13. By: Juliana de Sales Silva
    Abstract: Abstract The agricultural sector in one of the most dynamic industries of the Brazilian economy and is responsible for about 30% of the GDP of the state of Pará, located in the Brazilian Eastern Amazon region. This is mainly due to the public policies developed for the sector, with emphasis on the National Policy of Technical Assistance and Rural Extension (PNATER) and Rural Credit, in addition to conditional cash transfer programs such as Bolsa Família (Family Allowance). Given this scenario, the purpose of this research is to determine the technical efficiency of the agricultural rural facilities of Pará, and observe the effect of these policies on their inefficiency. The methodology employed in order to achieve these objectives is the stochastic frontier approach, and the data used was obtained from a special tabulation based on the 2006 Agricultural Census. The main results evidence that rural credit policies, social welfare programs, and technical support are important to reduce the technical inefficiency of the rural facilities of the State of Pará. The latter, however, is not statistically significant. Resumen El sector agrícola es uno de los más dinámicos de la economía brasilera y es responsable –aproximadamente– del 30% del PIB del estado de Pará, ubicado en la Amazonía oriental brasilera. Esto se debe –principalmente– a las políticas públicas desarrolladas para el sector, con énfasis en la Política Nacional de Asistencia Técnica y Extensión Rural (PNATER) y Crédito Rural, además de los programas condicionales de transferencia de efectivo, como Bolsa Familia. Ante este escenario, el objetivo de este artículo es determinar la eficiencia técnica de las instalaciones agrícolas rurales en Pará y observar el efecto de estas políticas en su ineficiencia. La metodología utilizada es el enfoque de la frontera estocástica Los datos utilizados se obtuvieron en una tabulación especial basada en el Censo Agrícola de 2006. Los principales resultados muestran que las políticas de crédito rural, los programas de asistencia social y el apoyo técnico son importantes para reducir la ineficiencia técnica de las instalaciones rurales en el Estado de Pará. Sin embargo, esta última no es estadísticamente significativa.
    Keywords: technical efficiency; Agriculture; stochastic production frontier; public policy; parametric; rural extension.
    JEL: B22 D22 Q12
    Date: 2021–01–15

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