nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2022‒02‒21
eleven papers chosen by

  1. Productivity Growth and Spillovers across European Industries: A Global Value Chain Perspective Based on EURO KLEMS By Liu, Weilin; Cheng, Qian; Sickles, Robin C.
  2. A statistical foundation for the measurement of managerial ability By Banker, Rajiv; Park, Han-Up; Sahoo, Biresh
  3. Fiscal decentralization and efficiency: empirical evidence from Italian municipalities By bucci, valeria; ferrara, giancarlo; resce, giuliano
  4. The Roles of Structured Management in the Formation of Transactional Relationships By Imani, Yusuke; Ohyama, Atsushi
  5. The Economic Implications of Training for Firm Performance By Martins, Pedro S.
  6. COVID-19 and the GDP fall in Germany: A Business Cycle Accounting Approach By Scholl, Christoph
  7. The Production Function for Housing: Evidence from France By Pierre-Philippe Combes; Gilles Duranton; Laurent Gobillon
  8. Relational Skills and Corporate Productivity By Leonardo Becchetti; Sara Mancini; Nazaria Solferino
  9. Presumptive taxation and firms’ efficiency: an integrated approach for tax compliance analysis By ferrara, giancarlo; campagna, arianna; bucci, valeria; atella, vincenzo
  10. Intangible Assets, Industry Performance and Finance During Crises By Carlo Altomonte; Peter Bauer; Alberto Maria Gilardi; Chiara Soriolo
  11. Information Sharing and Banking Efficiency in Africa: A Disaggregated Panel Data Analysis By Simplice A. Asongu; Nicholas M. Odhiambo

  1. By: Liu, Weilin (Institute of Economic and Social Development, Nankai University); Cheng, Qian (Institute of Economic and Social Development, Nankai University); Sickles, Robin C. (Rice University,)
    Abstract: The development of production networks has promoted knowledge flows and technology diffusion among industries over the past decades, which affects the productivity growth for most countries. This paper examines productivity growth in the presence of inter-sectoral linkages. We construct a spatial production model with technological spillovers and productivity growth heterogeneity at the industry-level. We use the global value chain (GVC) linkages from inter-country input-output tables to model the technological interdependence among industries, and estimate the total factor productivity (TFP) growth and spillover for the European countries. We find that the spillover effects from intermediate inputs is significant. There is a network effect of TFP growth from one country to another through input-output linkages. Our paper provides a better understanding of the impact of spillover effects on TFP growth in the context of GVCs.
    JEL: C23 C67 O47
    Date: 2022–01
  2. By: Banker, Rajiv; Park, Han-Up; Sahoo, Biresh
    Abstract: Demerjian, Lev, and McVay (2012) (DLM) provide a conceptual framework for the measurement of managerial ability using data envelopment analysis (DEA). We show that the DLM method provides a consistent estimator of managerial ability. The DLM approach to measuring managerial ability begins with the first stage estimation of firm efficiency in transforming inputs into outputs. The second stage removes the impact of contextual variables on the firm efficiency so that the residuals measure the impact of unobserved managerial ability. We leverage the properties of the DEA estimator (Banker and Natarajan 2008) to show that the DLM approach provides a statistically consistent estimator of the managerial ability’s impact on firm efficiency.
    Keywords: DEA, Efficiency, Managerial Ability, Simulation
    JEL: C63 C67 D24
    Date: 2022–01–08
  3. By: bucci, valeria; ferrara, giancarlo; resce, giuliano
    Abstract: This paper investigates the association between fiscal decentralization and municipality efficiency by conducting an empirical analysis focused on the Italian context. We conduct a cost efficiency analysis based on a stochastic frontier approach with municipality and time fixed effects for 2010-2016 modelling the decentralization effect with a continuous variable, taxation autonomy, which allows for accounting for the degree and evolution of fiscal decentralization over time. The empirical analysis provides convincing evidence that fiscal decentralization is positively associated with municipalities' efficiency, robust to inclusion into the model of a large set of control variables. This evidence lends support for policies aimed at making more closely aligned expenditure and revenue decision making.
    Keywords: Fiscal Decentralization; Local governance; Italian municipalities; Efficiency; Stochastic frontier analysis
    JEL: D61 H50 H77
    Date: 2022
  4. By: Imani, Yusuke; Ohyama, Atsushi
    Abstract: We empirically examine the roles of structured management in the formation of transactional relationships by using the Japanese version of Management and Organizational Practices Survey and the business-to-business transaction data from Teikoku Databank. Our unique approach is to use separate measures of productivity and managerial efficiency in this examination. Our main findings are summarized as follows: First, management scores (a proxy for managerial efficiency) are positively associated with a range of transactional partners even after a level of productivity is controlled for. Second, our estimation using an exogenous event caused by the Great East Japan earthquake appears to suggest that causality is at play in this relationship. Third, firms with higher management scores add and drop transactional partners more frequently than firms with lower management scores. Fourth, firms with higher management scores transact with larger firms. Finally, management scores are positively correlated with TFP, and negatively correlated with a measure of uncertainty. Further, the negative effect of uncertainty on the formation of transactional relationships is mitigated by managerial efficiency. Overall, the empirical results of this paper suggest that both production and managerial efficiency are important factors in facilitating the formation of transactional relationships.
    Keywords: Management Practices, Productivity, Transactional Relationship
    JEL: L2 M2 O32 O33
    Date: 2022–02
  5. By: Martins, Pedro S.
    Abstract: This paper surveys the emerging economics literature on the relationship between employee training and firm performance. Most studies find very high returns to training, at least from the perspective of firms, indicating that the costs of training can be recouped in short periods of time. These results follow from different identification approaches, including randomised control trials. The training provided is typically of a general nature, which is consistent with employers' labour market power. Several areas for future research are also proposed, including the role of labour market institutions in promoting training and the extent to which the productivity effects of training are shared with employees.
    Keywords: Productivity,Skills,Competences,Human Capital,Lifelong Learning,Employment,Public Policy,Programme Evaluation
    JEL: M53 I26 J24
    Date: 2022
  6. By: Scholl, Christoph
    Abstract: The Business Cycle Accounting method by Chari, Kehoe, and McGrattan (2007) helps identify theories that have quantitative promise in explaining economic fluctuations. In this paper, it will be applied to Germany to study the impact of the COVID-19 pandemic. The efficiency wedge primarily drove Germany’s recession. The extensive lockdowns that prevented existing production factors such as labor and capital from producing at their full potential can explain the productivity loss. This suggests that the lockdowns are well identified as significant drivers of the reduction in economic activity and that their end would predict a sharp recovery in Germany.
    Keywords: Macroeconomics, Business Cycles, Business Cycle Accounting, COVID-19, Germany, GDP Drop, Recession, Productivity,
    JEL: C0 E0 F0
    Date: 2022–01–16
  7. By: Pierre-Philippe Combes (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Gilles Duranton (University of Pennsylvania [Philadelphia]); Laurent Gobillon (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We propose a new nonparametric approach to estimate the production function for housing. Our estimation treats output as a latent variable and relies on a first-order condition for profit maximization combined with a zero-profit condition. More desirable locations command higher land prices and, in turn, more capital to build houses. For parcels of a given size, we compute housing production by summing across the marginal products of capital. For newly built single-family homes in France, the production function for housing is close to constant returns and is well, though not perfectly, approximated by a Cobb-Douglas function with a capital elasticity of 0.65.
    Keywords: Housing,Production function
    Date: 2021–10–01
  8. By: Leonardo Becchetti (CEIS & DEF, University of Rome "Tor Vergata"); Sara Mancini (University of Rome "Tor Vergata"); Nazaria Solferino (Università della Calabria)
    Abstract: Based on results of the different fields of the game theoretic literature on strategic interactions and social dilemmas, gift exchange and procedural utility, we argue that corporate social responsibility and relational skills i) with other firms; ii) between employers and workers iii) among workers and iv) with stakeholders are associated to positive effects on productivity. We test our research hypothesis on a large representative sample of Italian firms including the universe of medium and large companies and accounting for 91.3 percent of domestic employees. We find that companies with higher relational skills report significantly higher value added per worker after controlling for relevant concurring factors. More specifically, the identified significant skill related components are: i) corporate policies considering strategic workers’ wellbeing; ii) team working attitudes considered as priority soft skills when hiring workers; iii) initiatives in favour of the productive network operating in the same local area and iv) involvement of stakeholders in CSR projects.
    Keywords: relational skills, corporate productivity, gift exchange, team working
    JEL: L22 L25 L14 J53
    Date: 2022–01–25
  9. By: ferrara, giancarlo; campagna, arianna; bucci, valeria; atella, vincenzo
    Abstract: Presumptive taxation methods are policy tools widespread adopted by fiscal authorities with the aim to improve voluntary tax compliance and to fight tax evasion. Such methods allow authorities to uncover firms’ under-reporting, but face several limits. In particular, presumptive taxation methods do not allow to disentangle when the presence of under-reporting is ascribable to tax evasion behaviour or to the lack of managerial skills and inefficiency. To overcome the main presumptive taxation weakness, we propose combining presumptive frameworks with a measure of technical efficiency, thus developing an integrated approach for tax evasion analysis able to support the audit activities of fiscal authorities. Further, we provide some considerations in terms of tax compliance and support our approach with evidence obtained from an empirical application based on Italian firms.
    Keywords: Tax Compliance, Presumptive Taxation, Efficiency, Stochastic Frontier, Business Sector Studies
    JEL: C14 D24 H26 H32
    Date: 2021
  10. By: Carlo Altomonte; Peter Bauer; Alberto Maria Gilardi; Chiara Soriolo
    Abstract: We take the global financial crisis (GFC), as an example of major crises, to study the trends of intangible investment, the link between industrial performance and intangible assets, and the differences of financing of intangible versus tangible assets during crises. We find an upward trend in investment intensities (investment-to-value added) for several kinds of intangible assets in almost all advanced EU countries, and in almost all sectors based on industry-level data. This trend started well before the GFC and the crisis had little impact on it, in contrast to tangible investment intensities, which declined a lot. Then we explore the potential role that intangible assets may play in weathering the negative effects of major crises using industry-level data. One of the main results about industrial performance is that pre-crisis R&D investment is robustly associated with economic resilience during the GFC, and higher productivity growth in the aftermath. Finally, we investigate how a financial turmoil may affect the financing of different assets. We combine insights from a macro (industry-level) and a micro (firm-level) approach to shed light on the importance of financial shocks in intangible investment. We find differences from tangible investment, mainly that tangibles are more sensitive to demand shocks, while intangible investment is more vulnerable to financial shocks. For the latter, our main explanation is that tight credit conditions create a trade-off between tangible and intangible investment financing.
    Keywords: productivity, financial crisis, resilience, intangible assets
    JEL: G01 D22 D24 G31
    Date: 2022
  11. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The study assesses the how information sharing by means of mobile phones affects banking system efficiency in Africa with particular emphasis on income levels (Middle income versus Low income countries) and legal origins (English Common law versus French Civil law countries). The focus is on 53 African countries with data for the period 1996-2019 and the empirical evidence is based in Quantile regressions which enable the study to assess the nexus throughout the conditional distribution of banking system efficiency. The following findings are established: (i) mobile phone penetration promotes banking system efficiency in the 25th quantile and the median of banking system efficiency in low income countries while for middle income countries; it is significant exclusively in the bottom quantile (i.e. 10th quantile). (ii) With the exception of the highest (i.e. 90th) quantile in which the effect of the mobile phone is not significant in English Common law countries, the impact is significant throughout the conditional distribution of banking system efficiency in Common law countries. (iii) As for French Civil law countries, the nexus is only significant in the median and highest (i.e. 90th) quantile of the conditional distribution of banking system efficiency. Policy implications are discussed.
    Keywords: Allocation efficiency; Information asymmetry; Mobile phones
    JEL: G20 G29 L96 O40 O55
    Date: 2022–01

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