nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2021‒12‒20
nineteen papers chosen by

  1. Productivity and Efficiency in Uruguay: A Stochastic Approach By García-Suarez, Federico
  2. Analysis of Agricultural Productivity in Paraguay: A MICRO Econometric Approach By Gatti, Nicolás
  3. Analyzing Technical Efficiency and Bird-Chasing of Small-Scale Rice Production in Cameroon. By Mouafor, Boris Igwacho
  4. Ultra-Fast Broadband Access and Productivity :Evidence from Italian Firms By Carlo Cambini; Elena Grinza; Lorien Sabatino
  5. Financial constraints and productivity growth: firm-level evidence from a large emerging economy By Yusuf Kenan Bagir; Unal Seven
  6. Wales’ Productivity Challenge: Exploring the issues By Andrew Henley
  7. The Fallacy in Productivity Decomposition By Simon Bruhn; Thomas Grebel; Lionel Nesta
  8. Scotland's Productivity Challenge: Exploring the issues By John Tsoukalas
  9. Small and Vulnerable: Small Firm Productivity in the Great Productivity Slowdown By Sophia Chen; Do Lee
  10. Increasing Crop Productivity and Economic Benefits with Hydropriming Seeds and Livestock Land Management By Thomas, Nicola
  11. Northern Ireland's Productivity Challenge: Exploring the issues By David Jordan; John Turner
  12. Rebound effect with energy efficiency determinants: a two-stage analysis of residential electricity consumption in Indonesia By Adha, Rishan; Hong, Cheng-Yih; Firmansyah, M.; Paranata, Ade
  13. Access to finance employment growth and firm performance of South Asia firms By Bui, Anh Tuan; Pham, Linh Chi; Ta, Thi Khanh Van
  14. The North West of England's Productivity Challenge: Exploring the issues By John Holden; Marianne Sensier; Richard Allmendinger
  15. Labor Market Effects of Technology Shocks Biased toward the Traded Sector By Luisito Bertinelli; Olivier Cardi; Romain Restout
  16. Tariffs, productivity, and resource misallocation By Michael Kilumelume; Bruno Morando; Carol Newman; John Rand
  17. Productivity and Real Exchange Rates for India: Does Balassa-Samuelson Effect Explain? By Ghosh, Saurabh; Nath, Siddhartha; Srivastava, Sauhard
  18. Robots at Work?. Pitfalls of Industry Level Data By Karim Bekhtiar; Benjamin Bittschi; Richard Sellner
  19. Growth Performance and Profitability of Rice Production in India: An Assertive Analysis By Singh, K.M.; Ahmad, Nasim; Pandey, Vagish Vandana; Kumari, Tulika; Singh, Ritambhara

  1. By: García-Suarez, Federico
    Keywords: Productivity Analysis, Research Methods/ Statistical Methods
    Date: 2021–08
  2. By: Gatti, Nicolás
    Keywords: Productivity Analysis, Research Methods/ Statistical Methods
    Date: 2021–08
  3. By: Mouafor, Boris Igwacho
    Keywords: Crop Production/Industries
    Date: 2021–08
  4. By: Carlo Cambini; Elena Grinza; Lorien Sabatino
    Abstract: We study the impact of ultra-fast broadband (UFB) infrastructures on the total factor productivity (TFP) and labor productivity of firms. We use unique balanced panel data for the 2013-2019 period on incorporated firms in Italy. Using the geographical location of the firms, we match firm data with municipality-level information on the diffusion of UFB, which started in 2015 in Italy. We derive consistent firm-level TFP estimates by adopting a version of the Ackerberg et al.’s (2015) method, which also accounts for firm fixed effects. We then assess the impact of UFB on productivity and deal with the endogeneity of UFB by exploiting the physical distance between each municipality and the closest backbone node. Our results show an overall positive impact of UFB on productivity. Services companies benefit the most from advanced broadband technologies, as do firms located in the North-West and South of Italy. We further decompose the impact of full-fiber networks (FTTH) from mixed copper-fiber connections (FTTC) and find that FTTH networks significantly contribute to enhancing firm productivity. Finally, by exploiting Labor Force Survey data, we provide suggestive evidence that productivity increases from UFB might be related to structural changes at the workforce level.
    Keywords: Ultra-fast broadband (UFB); fiber-based networks; fiber-to-the-home (FTTH)
    JEL: L96 D24 D22
    Date: 2021–12–03
  5. By: Yusuf Kenan Bagir; Unal Seven
    Abstract: We study whether the linkage between financing and productivity growth strengthens as the severity of financial constraints increases by using firm-level administrative data from a large emerging economy. We also explore whether upstream firms’ financial constraints play a role in the linkage between finance and productivity. Using a combination of administrative databases of tax registry and firm-to-firm trade data of 896,317 Turkish firms from 2007 to 2018, employing various robustness tests and controlling for reverse causality, we find strong evidence that firms facing higher financial constraints exhibit a higher sensitivity of total factor productivity (TFP) growth to debt growth. Moreover, we show that a rise in upstream firms’ financial constraint level also leads to increased sensitivity of TFP growth to debt growth. Our results reveal important channels through which financial constraints could hinder productivity growth in Turkey.
    Keywords: TFP growth, Financial constraints, Debt growth
    JEL: D24 G30 O16
    Date: 2021
  6. By: Andrew Henley (Cardiff Business School, Cardiff University, The Productivity Institute)
    Keywords: productivity, Wales
    Date: 2021–12
  7. By: Simon Bruhn (Ilmenau University of Technology, Ilmenau, Germany); Thomas Grebel (Ilmenau University of Technology, Ilmenau, Germany); Lionel Nesta (Université Côte d'Azur, France; GREDEG CNRS; OFCE, SciencesPo; SKEMA Business School)
    Abstract: This paper argues that the typical practice of performing growth decompositions based on log-transformed productivity values induces fallacious conclusions: using logs may lead to an inaccurate aggregate growth rate, an inaccurate description of the microsources of aggregate growth, or both. We identify the mathematical sources of this log-induced fallacy in decomposition and analytically demonstrate the questionable reliability of log results. Using firm-level data from the French manufacturing sector during the 2009-2018 period, we empirically show that the magnitude of the log-induced distortions is substantial. Depending on the definition of accurate log measures, we find that around 60-80% of four-digit industry results are prone to mismeasurement. We further find significant correlations of this mismeasurement with commonly deployed industry characteristics, indicating, among other things, that less competitive industries are more prone to log distortions. Evidently, these correlations also affect the validity of studies that investigate the role of industry characteristics in productivity growth.
    Keywords: productivity decomposition, growth, log approximation, geometric mean, arithmetic mean
    JEL: C18 L22 L25 O47
    Date: 2021–12
  8. By: John Tsoukalas (Adam Smith Business School, University of Glasgow, The Productivity Institute)
    Keywords: productivity, Scotland
    Date: 2021–12
  9. By: Sophia Chen; Do Lee
    Abstract: We provide broad-based evidence of a firm size premium of total factor productivity (TFP) growth in Europe after the Global Financial Crisis. The TFP growth of smaller firms was more adversely affected and diverged from their larger counterparts after the crisis. The impact was progressively larger for medium, small, and micro firms relative to large firms. It was also disproportionally larger for firms with limited credit market access. Moreover, smaller firms were less likely to have access to safer banks: those that were better capitalized banks and with a presence in the credit default swap market. Horseraces suggest that firm size may be a more important and robust vulnerability indicator than balance sheet characteristics. Our results imply that the tightening of credit market conditions during the crisis, coupled with limited credit market access especially among micro, small, and medium firms, may have contributed to the large and persistent drop in aggregate TFP.
    Keywords: Credit constraint;Financial crisis;Firm size;Intangibles;Producvitity;SMEs;WP;TFP growth;creditor bank;size premium;credit market access;micro firm;vulnerability indicator
    Date: 2020–12–18
  10. By: Thomas, Nicola
    Keywords: Land Economics/Use, Productivity Analysis
    Date: 2021–08
  11. By: David Jordan (Queen's University Belfast, The Productivity Institute); John Turner (Queen's University Belfast, The Productivity Institute)
    Keywords: productivity, Northern Ireland
    Date: 2021–10
  12. By: Adha, Rishan; Hong, Cheng-Yih; Firmansyah, M.; Paranata, Ade
    Abstract: This study aims to estimate the economy-wide rebound effect using the determinants of household energy demand in Indonesia. Identifying the size of the rebound effect is essential for the government's energy efficiency and carbon emission reduction programs. The estimation of the rebound effect uses a two-stage analysis with panel data of every province in Indonesia from 2002 to 2018. We employ the Input Demand Function of the Stochastic Frontier Analysis to measure the energy efficiency of residential aggregate in Indonesia. In the second stage, we adopt the dynamic panel data model to estimate the economy-wide rebound effect. The estimated dynamic panel data model reveals that the magnitudes of the short-run and long-run rebound effects were 87.2% and -45.5%, respectively. In other words, a 1% increase in household energy efficiency results in a reduction in energy consumption of 0.13% in the short term and 1.45% in the long term. Our research also discovers that a backfire rebound effect exists in provinces with high energy efficiency. Therefore, we prove to backfire claims that improving energy efficiency will increase energy use. Henceforth, energy efficiency programs in the household sector still need to be implemented, followed by increasing technological innovation and improving housing policy.
    Keywords: Electricity demand, energy efficiency, rebound effect, stochastic frontier analysis
    JEL: C23 Q41 Q43
    Date: 2021–03–30
  13. By: Bui, Anh Tuan; Pham, Linh Chi; Ta, Thi Khanh Van
    Abstract: Using firm-level data on 11,000 companies across seven countries in South Asia, this paper explores the effects of access to finance on employment growth and performance at the firm level. The paper focuses on how the impact of financing obstacles varies across firm sizes. The results show that higher obstacles in access to finance reduces employment growth and performance for firms of all sizes, especially micro and small firms. We find significant differences between firms with less than 10 employees and small firm, which suggests that significant reforms are needed to drive micro firm growth to small and medium enterprises.
    Keywords: Access to finance obstacles,employment growth,Total factor of productivity
    JEL: J21 J41 M51
    Date: 2021
  14. By: John Holden (The University of Manchester, The Productivity Institute); Marianne Sensier (Alliance Manchester Business School, The University of Manchester, The Productivity Institute); Richard Allmendinger (Alliance Manchester Business School, The University of Manchester, The Productivity Institute)
    Keywords: productivity, North West England
    Date: 2021–10
  15. By: Luisito Bertinelli; Olivier Cardi; Romain Restout
    Abstract: Motivated by recent evidence pointing at an increasing contribution of asymmetric shocks across sectors to economic fluctuations, we explore the labor market effects of technology shocks biased toward the traded sector. Our VAR evidence for seventeen OECD countries reveals that the non-traded sector alone drives the increase in total hours worked following a technology shock that increases permanently traded relative to non-traded TFP. The shock generates a reallocation of labor toward the non-traded sector which contributes to 35% on average of the rise in non-traded hours worked. Both labor reallocation and variations in labor income shares are found empirically connected with factor-biased technological change. Our quantitative analysis shows that a two-sector open economy model with flexible prices can reproduce the labor market effects we document empirically once we allow for imperfect mobility of labor, gross substitutability between home- and foreign-produced traded goods, and factor-biased technological change. When calibrating the model to country-specific data, its ability to account for the cross-country reallocation and redistributive effects we estimate increases once we let factor-biased technological change vary between sectors and across countries.
    Keywords: Sector-biased technology shocks, Factor-augmenting efficiency, Open economy, Labor reallocation, CES production function, Labor income share
    JEL: E21 E32 F11 F41 O33
    Date: 2021
  16. By: Michael Kilumelume; Bruno Morando; Carol Newman; John Rand
    Abstract: An often-neglected potential negative consequence of tariffs is the impact they may have on the misallocation of factor inputs. Trade protection can provide space for domestic firms to increase prices and mark-ups, allowing low-productivity firms to survive, thereby leading to a sub-optimal allocation of resources. This paper explores the impact of tariffs on the allocation of capital using administrative data from South Africa. We find that tariffs are highly correlated with capital misallocation, leading to aggregate productivity losses of 5-10 per cent.
    Keywords: Tariffs, Productivity, Misallocation, South Africa
    Date: 2021
  17. By: Ghosh, Saurabh; Nath, Siddhartha; Srivastava, Sauhard
    Abstract: We attempt to explore the long-term equilibrium relationship between India’s real exchange rates and sectoral productivity trends using internationally comparable productivity databases such as KLEMS databases for India, China, Euro area, USA, UK and Japan. Our panel-ARDL results find support for an ‘extended’ Balassa-Samuelson hypothesis that allows for labour market frictions that does not allow for wage equalisation between traded and non-traded sectors within a country. These empirical findings are also robust to both labour productivity and total factor productivity as alternative measures of sectoral productivity. This mechanism continues to find some support when we separate out distribution sector, that comprises wholesale and retail trade in the domestic services sector. Our empirical evidence suggests that India’s real exchange rate is anchored to domestic fundamentals and is closely aligned to its fair value over a medium to long-time horizon.
    Keywords: Balassa-Samuelson Model, Real exchange rate, Productivity, Trade, Panel Data
    JEL: F11 F41
    Date: 2021–12–12
  18. By: Karim Bekhtiar; Benjamin Bittschi (Austrian Institute of Economic Research); Richard Sellner
    Abstract: In a seminal paper Graetz and Michaels (2018) find that robots increase labor productivity and TFP, lower output prices and adversely affect the employment share of low-skilled labor. We demonstrate that these effects are heavily influenced by the sample composition and argue that focusing on manufacturing and mining sectors mitigates unobserved heterogeneity and is more coherent with an identification strategy that rests on instruments that do not vary by industries. In sum, this leads to more plausible results regarding the overall economic effects of robotization, whereby the focus on robotizing industries leads to a sizable drop of the productivity effects, halving the effect size for labor productivity and insignificant price effects. The most pronounced consequences from the sample choice occur for labor market outcomes, where significant negative employment effects become insignificant and positive wage effects are reversed into the opposite. We show that controlling for demographic workforce characteristics is essential for obtaining significant labor productivity effects and leads to the negative effects of robots on wages. Additionally, investigating only robotizing sectors does not corroborate skill-biased technological change due to robotization, but rather, indicates towards labor market polarization. Finally, we document a non-monotonicity in one of the instruments, which calls for caution in the use of that instrument.
    Keywords: Robots, Productivity, Technological change
    Date: 2021–12–09
  19. By: Singh, K.M.; Ahmad, Nasim; Pandey, Vagish Vandana; Kumari, Tulika; Singh, Ritambhara
    Abstract: Rice is the most important staple food of the country consumed by about 65 per cent of the population (Singh and Singh, 2020). It is grown in almost all the states, however, the major rice producing states with respect to its share in total rice production of the country during 2018-19 are West Bengal (13.79%), Uttar Pradesh (13.34%), Andhra Pradesh including Telangana (12.84%), Punjab (11.01%), Odisha (6.28%), Chhattisgarh (5.61%), Tamil Nadu (5.54%), Bihar (5.19%), Assam (4.41%), Haryana (3.88%) and Madhya Pradesh (3.86%). In the present study, an attempt has been made to assess the growth trends and instability in area, production and productivity of rice in major rice growing states during the period 2001-02 to 2018-19. The results of the investigation revealed that compound growth rate of area under rice was almost constant in the country during the period under investigation while it was fluctuating across the states but growth rates of production and productivity was found positive and significant. Instability indices of area under rice were found to be less as compared to production and productivity. Although production of rice has increased due to technological changes in cultivation practices but increased instability in production also indicated distress in rice production across the states. Most of the States registered negative profitability in rice cultivation and only the farm business income was found to be positive. Hence, policy makers, planners and stakeholders should formulate policies to sustain the rice farming in the country for food security of the nation. Restriction may be imposed on purchase of rice below MSP or government may adopt proper mechanism to stop distress sale of farm produces particularly rice. As paddy is water consuming crop and sustainability of ground water and other natural resources is threatened from paddy cultivation in areas with scarce groundwater specifically in states like Punjab and Haryana. It would adversely affect food security in the long run. Hence, farmers should be encouraged to shift out from paddy cultivation in the states where groundwater is depleting and should only grow paddy in water surplus areas keeping the sustainability of groundwater in mind.
    Keywords: Rice, Growth, Instability, Profitability, Loss, Farm business income
    JEL: O11 O13 Q1 Q12
    Date: 2021–06–10

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