nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2022‒04‒11
fourteen papers chosen by

  1. Foreign Direct Investment, Information Technology and Total Factor Productivity Dynamics in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  2. A measure of well-being efficiency based on the World Happiness Report By Sarracino, Francesco; O'Connor, Kelsey J.
  3. Infrastructure and Firm Performance in CAREC Countries: Cross-Sectional Evidence at the Firm Level By Azhgaliyeva, Dina; Mishra, Ranjeeta; Yoshino, Naoyuki; Karymshakov, Kamalbek
  4. Government Procurement and Access to Credit: Firm Dynamics and Aggregate Implications By Julian di Giovanni; Manuel García-Santana; Priit Jeenas; Enrique Moral-Benito; Josep Pijoan-Mas
  5. Implications of Aggregation Uncertainty in DEA By Emil Heesche; Mette Asmild
  6. Renewal of Companies: Industry Switching as a Form of Structural Change By Kuosmanen, Natalia; Kuosmanen, Timo; Ali-Yrkkö, Jyrki; Pajarinen, Mika
  7. Agricultural productivity and land inequality. Evidence from the Philippines By Ludovic Bequet
  8. Productivity Dynamics of Working from Home during the COVID-19 Pandemic: Evidence from a Panel of Firm Surveys (Japanese) By MORIKAWA Masayuki
  9. Econometric Analysis of the Determinants of Bank Profitability in Three Major African Counties: Kenya, Nigeria and South Africa By Davis, E Philip; Ali Abdilahi, Ridwa
  10. Determinants of non-performing loans: a panel data approach By Cândida Ferreira
  11. You reap what (you think) you sow? Evidence on farmers’behavioral adjustments in the case of correct crop varietal identification By Paola Mallia
  12. A simulation model for evaluating the efficiency of robot-supported order picking warehouses. By Zhang, Minqi; Winkelhaus, Sven; Grosse, E. H.; Glock, C. H.
  13. Cost-Effectiveness of Energy Efficiency and Renewable Energy Technologies for Reducing Peak Demand By Moncef Krati; Mohammad Aldubyan
  14. Adoption of Eco and Circular Economy-Innovation in Italy: exploring different firm profiles By Massimiliano Mazzanti; Francesco Nicolli; Stefano Pareglio; Marco Quatrosi

  1. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: Compared to other regions of the world, the potential for information technology penetration in sub-Saharan Africa (SSA) is very high. Unfortunately, productivity levels in the region are also very low. This study investigates the importance of information technology in influencing the effect of foreign direct investment (FDI) on total factor productivity (TFP) dynamics. The focus is on 25 countries in SSA. Information technology is measured with mobile phone penetration and internet penetration, while the engaged TFP productivity dynamics are TFP, real TFP, welfare TFP, and real welfare TFP. The empirical evidence is based on the Generalised Method of Moments. The findings show that, with the exception of regressions pertaining to real TFP growth for which the estimations do not pass post-estimation diagnostic tests, it is apparent that information technology (i.e. mobile phone penetration and internet penetration) modulate FDI to positively influence TFP dynamics (i.e. TFP, welfare TFP, and welfare real TFP). Policy and theoretical implications are discussed.
    Keywords: E23; F21; F30; L96; O55
    Date: 2022–01
  2. By: Sarracino, Francesco; O'Connor, Kelsey J.
    Abstract: We propose a measure of well-being efficiency to assess countries' ability to transform inputs into subjective well-being (Cantril ladder). We use the six inputs (real GDP per capita, healthy life expectancy, social support, freedom of choice, absence of corruption, and generosity) identified in the World Happiness Reports and apply Data Envelopment Analysis to a sample of 126 countries. Efficiency scores reveal that high ranking subjective well-being countries, such as the Nordics, are not strictly the most efficient ones. Also, the scores are uncorrelated with economic efficiency. This means that the implicit assumption that economic efficiency promotes well-being is not supported. Well-being efficiency can be improved by changing the amount (scale) or composition of inputs and their use (technical efficiency). For instance countries with lower unemployment, and greater healthy life expectancy and optimism are more efficient.
    Keywords: subjective well-being,World Happiness Report,efficiency,Data Envelopment Analysis
    JEL: I31 E23 D60 O47 O15
    Date: 2022
  3. By: Azhgaliyeva, Dina (Asian Development Bank Institute); Mishra, Ranjeeta (Asian Development Bank Institute); Yoshino, Naoyuki (Asian Development Bank Institute); Karymshakov, Kamalbek (Asian Development Bank Institute)
    Abstract: This study aims to examine the impact of infrastructure on firm performance in nine CAREC countries: Afghanistan, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, and Uzbekistan. Empirical analysis is based on the enterprise survey for 2009, 2013, and 2019. Infrastructure is measured by the duration of power outages, electricity expenses as the share of total sales, access to broadband internet and efficiency of customs. Firm performance was measured by total sales, share of utilized capacity, dummy variable if firm exports, and the share of export sales. Results indicate that firm performance measured through sales and capacity utilization is negatively affected by the duration of power outages and electricity expenses. Moreover, access to broadband internet significantly increases the total sales and export sales of small firms, while efficiency of customs increases the exporting activities of medium and large firms. These findings underline that for the development of private sector and international trade in CAREC countries, sustainable access to, and quality of, electricity, telecommunications, and customs efficiency are important objectives for government policy.
    Keywords: Central Asia; electricity; telecommunications; infrastructure
    JEL: D24 H54 O18 Q41 Q48
    Date: 2021–05
  4. By: Julian di Giovanni; Manuel García-Santana; Priit Jeenas; Enrique Moral-Benito; Josep Pijoan-Mas
    Abstract: We provide a framework to study how different allocation systems of public procurement contracts affect firm dynamics and long-run macroeconomic outcomes. We start by using a newly created panel data set of administrative data that merges Spanish credit register loan data, quasi-census firm-level data, and public procurement projects to study firm selection into procurement and the effects of procurement on credit growth and firm growth. We show evidence consistent with the hypotheses that there is selection of large firms into procurement, that procurement contracts provide useful collateral for firms more so than sales to the private sector and that procurement contracts facilitate firm growth beyond the contract duration. We next build a model of firm dynamics with both asset-based and earnings-based borrowing constraints and a government that buys goods and services from private sector firms. We use the calibrated model to quantify the long-run macroeconomic consequences of alternative procurement allocation systems. We find that granting procurement contracts to small firms, either by directly targeting them or by slicing large contracts into smaller ones, helps these firms grow and overcome financial constraints in the long run. However, we also find that reducing the average size of contracts or making it less likely for large firms to access them removes saving incentives for large firms, whose negative effects on capital accumulation can overcome the expansionary consequences for small firms and hence generate a drop in aggregate output.
    Keywords: government procurement; financial frictions; capital accumulation; aggregate productivity
    JEL: E22 E23 E62 G32
    Date: 2022–02–01
  5. By: Emil Heesche (Department of Food and Resource Economics, University of Copenhagen); Mette Asmild (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: Researchers and practitioners who use Data Envelopment Analysis often want to incorporate several inputs and outputs in their model to consider as much relevant information as possible. However, too many inputs and outputs can result in the well-known dimensionality problem referred to as the “curse of dimensionality”. Several studies suggest how to solve, or at least reduce, this problem. One solution is to aggregate the inputs and outputs before using them in the model. This paper examines the implications when the methods used to aggregate the inputs and outputs contain uncertainty. The uncertainty can, for example, be price uncertainty if we use input and/or output prices for the aggregation. We show that the implications for a unit under analysis depend entirely on its input and output mixes relative to those of its peers, and that the implications are higher the more heterogeneous the sector is. As an example, we use the Danish benchmarking regulation of the waste water companies. We find that uncertainty in the regulator's aggregation scheme does not, on average, influence the companies' efficiency scores a lot. Still, individual companies can be greatly affected by this uncertainty.
    Keywords: Data Envelopment Analysis; Regulation; Aggregation Uncertainty; Permutation Tests
    JEL: C02 C14 C51 C52 C61 C67 L51
    Date: 2022–03
  6. By: Kuosmanen, Natalia; Kuosmanen, Timo; Ali-Yrkkö, Jyrki; Pajarinen, Mika
    Abstract: Abstract The contributions of entry and exit of firms to aggregate productivity growth are well-established in the literature. However, the impact of industry switching of firms on productivity remains overlooked. The purpose of this report is to shed new light on the role of industry switching as a form of structural change. The results show that industry switching is very common and occurs in all industries in Finland, especially during the times of recession. Industry switching has had both positive and negative contributions to aggregate productivity in different periods. Intra-industry switching had mainly negative impact on productivity growth suggesting that switching was taken as a strategy to survive. On the other hand, inter-industry switching had mainly positive impact on productivity growth, suggesting that switching was associated with new products and technologies. The study also looked at the structural developments of industries relevant for combating climate change. As emission reduction targets require companies to renew their product and service offerings, climate policy can help guide companies to switch industries. However, in the industries examined in the study, restructuring has so far taken place mainly through entry and exit.
    Keywords: Industrial structure, Industry switching, Labor productivity, Productivity decompositions
    JEL: C81 D22 L16
    Date: 2022–03–28
  7. By: Ludovic Bequet (Center for Research in the Economics of Development, University of Namur)
    Abstract: This paper presents the first detailed empirical evaluation of the effect of agricultural productivity on land inequality using the context of genetically modified (GM) corn seeds introduction in the Philippines. Using three waves of census data covering 21 years and 17 million plots, I identify the effect by exploiting exogenous variations in soil and weather, leading to differences in potential gain from GM corn cultivation. Results show that municipalities that benefited more from the technology experienced an increase in landholding inequality, measured by the area farmed by top decile and by the Gini index. This effect is partly driven by a relative increase in agricultural land and more precisely by a lower contraction in more affected areas. While increased land inequality is associated with a higher level of terrorist activity, it does not seem to have any adverse effect on poverty, household income or expenditure.
    Date: 2022–02
  8. By: MORIKAWA Masayuki
    Abstract: This paper presents an overview of the adoption, intensity, and productivity of working-from-home (WFH) during the COVID-19 pandemic using panel data from original firm surveys. According to the results, first, both the ratio of WFH-adopting firms and the intensity of WFH decreased substantially compared to when the first State of Emergency was declared in 2020. Second, although mean WFH productivity improved by a few percentage points, it is still about 20% lower than productivity at the workplaces. The firms' evaluation of WFH productivity is quite similar to the result obtained from a survey of workers. Third, as the COVID-19 pandemic has continued, increasing numbers of firms introduced cost subsidies for WFH employees and reduced office space. Fourth, about half of firms are planning to discontinue the WFH practice and to revert to the conventional workstyle after the end of COVID-19, indicating that there is a large gap between corporate interests and the preferences of WFH workers.
    Date: 2021–02
  9. By: Davis, E Philip; Ali Abdilahi, Ridwa
    Abstract: Our panel econometric approach, using bank-level fixed effects, seeks to identify the bank-specific, banking-market and macroeconomic determinants of bank profitability in 240 banks across the three countries over 1990-2019. Across a range of estimates, we find that bank liquidity and the non-interest income to total income ratio had a significant positive effect on profitability while credit risk and the cost-to-income ratio had a significant negative effect. In most models, real GDP growth affected bank profitability positively. Small banks and large banks differ in terms of their determinants of profitability. There are important implications for both bank management and regulators, which in turn may affect both financial stability and scope for economic development.
    Keywords: Bank management, bank profitability, bank regulation, financial and economic development, financial stability, Sub-Saharan Africa, Sub-Saharan AfricanB Banks
    JEL: C01 C13 C23 C51
    Date: 2022–03
  10. By: Cândida Ferreira
    Abstract: This paper analyses the evolution of the bank non-performance loans to total loans ratio using three categories of explaining variables: bank performance indicators (bank credit to bank deposits ration, bank cost to income ratio, bank net interest margin, bank noninterest income to total income, and bank return on assets), market conditions and financial structure indicators (bank concentration, Lerner index, bank Z-score, bank regulatory to risk-weighted assets, and bank crisis dummy), and economic growth indicator (natural logarithm of real GDP per capita). The paper applies panel fixed effects and dynamic Generalised Method of Moments (GMM) estimates to a panel of 80 countries spread by all Continents, over the period 1999-2017. The results obtained clearly demonstrate that bank performance, bank market conditions, and bank capital regulation are relevant to explain the evolution of non-performance loans, but the promotion of economic growth is always much more important to assure the decrease the levels of non-performing loans, preventing the losses of the banking system as well as potential financial crisis.
    Keywords: Bank risk, non-performing loans, bank performance, bank market conditions, panel estimates.
    JEL: G21 G15 G32 F39 C33
    Date: 2022–03
  11. By: Paola Mallia (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: Adoption of improved seed varieties has the potential to lead to substantial pro ductivity increases in agriculture. However, only 36 percent of the farmers that grow an improved maize variety report doing so in Ethiopia. This paper provides the first causal evidence of the impact of misperception in improved maize varieties on farm ers' production decisions, productivity and profitability. We employ an Instrumental Variable approach that takes advantage of the roll-out of a governmental program that increases transparency in the seed sector. We find that farmers who correctly classify the improved maize variety grown experience large increases in inputs usage (urea, NPS, labor) and yields, but no statistically significant changes in other agricul tural practices or profits. Using machine learning techniques, we develop a model of interpolation to predict objectively measured varietal identification from farmers' self reported data which provides proof-of-concept towards scalable approaches to obtain reliable measures of crop varieties and allows us to extend the analysis to the nationally representative sample.
    Date: 2022–03
  12. By: Zhang, Minqi; Winkelhaus, Sven; Grosse, E. H.; Glock, C. H.
    Date: 2021–07–12
  13. By: Moncef Krati; Mohammad Aldubyan (King Abdullah Petroleum Studies and Research Center)
    Abstract: This paper describes an optimization-based approach to evaluate measures providing peak electricity demand reduction cost benefits for Saudi residential buildings. These measures can be categorized as energy efficiency (EE) and renewable energy (RE) measures. Specifically, this paper models the existing Saudi building stock using 56 housing prototypes based on types, vintages and locations.
    Keywords: Energy Efficiency, Residential Buildings, Electricity demand
    Date: 2021–12–22
  14. By: Massimiliano Mazzanti (University of Ferrara); Francesco Nicolli (University of Ferrara); Stefano Pareglio (Università Cattolica del Sacro Cuore); Marco Quatrosi (University of Ferrara)
    Abstract: Applying clustering techniques, this paper identifies homogeneous groups of enterprises within the heterogeneous landscape of the italian manufacturing tissue. The algorithm will be fed with data from a survey on a cross-section of SMEs in 2019. The set of questions span from economic and financial performances to innovation adoption (product, process, organization), to circular economy implementation and environmental protection. Clustering has been chosen to identify groups of firms with respect to multiple and diverse characteristics without any preexisting hypothesis on a possible relationship among the variables. Results will group profiles of enterprises considering the information on multi-dimensional aspects of a firm. Indeed, the overarching aim of this work is to single out common characteristics among the diverse landscape of enterprises within the manufacturing sector. This will in turn support (local and national) policy makers in better designing and targeting an appropriate set of policy instruments with respect to the relevant areas (i.e., circular economy, environmental protection, eco-innovation) of the ecological/sustainability transition. If the one-size-fits-all has not been proved a viable approach in policy making, a more targeted intervention at policy level tackling the consistent heterogeneity of the manufacturing tissue might improve the effectiveness of (sectorial) policies.
    Keywords: Circular Economy, Sustainable production, Environmental Innovation, Cluster analysis, Firm profile
    JEL: O30 O44 O55
    Date: 2022–02

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