nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2022‒05‒09
sixteen papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Intangible Capital and Labor Productivity Growth – Revisiting the Evidence: An Update By Roth, Felix
  2. Assessing Misallocation in Agriculture: Plots versus Farms By Fernando M. Aragón; Diego Restuccia; Juan Pablo Rud
  3. The Impact of Contract Enforcement Costs on Outsourcing and Aggregate Productivity By Johannes Boehm
  4. Measuring the intangible economy to address policy challenges By Marie Le Mouel
  5. LASSO for Stochastic Frontier Models with Many Efficient Firms By William C. Horrace; Hyunseok Jung; Yoonseok Lee
  6. Productivity and Business Dynamism in Japan — Comparison with the EU Countries Using Firm-level Data (Japanese) By MIYAKAWA Daisuke; TAKIZAWA Miho
  7. Productivity Analysis of Latvian Companies Using Orbis Database By Olegs Krasnopjorovs; Konstantins Kovalovs
  8. The economic performance of transitional and non-transitional organic dairy farms: A panel data econometric approach in Brittany By Elodie Letort; Aude Ridier
  9. Local Property Tax Reform and Municipality Spending Efficiency By António Afonso; Ana Venâncio
  10. Small and medium enterprises in regions - empirical and quantitative approach By Ladislav Mura; Zuzana Hajduová
  11. On the economic value of the agronomic effects of crop diversification for farmers: estimation based on farm cost accounting data By Ibirénoyé Honoré Romaric Sodjahin; Fabienne Femenia; Obafémi Philippe Koutchade; Alain Carpentier
  12. Assessing global potential output growth and the US neutral rate: April 2022 By Kyle Boutilier; Thomas J. Carter; Xin Scott Chen; Eshini Ekanayake; Louis Poirier; Peter Shannon; Akash Uppal; Lin Xiang
  13. The low productivity of European firms- how can policies enhance the allocation of resources? By Grégory Claeys; Marie Le Mouel; Giovanni Sgaravatti
  14. Technology and jobs: A systematic literature review By Kerstin H\"otte; Melline Somers; Angelos Theodorakopoulos
  15. Energy Efficiency and Directed Technical Change: Implications for Climate Change Mitigation By Gregory P. Casey
  16. Potential output and the neutral rate in Canada: 2022 reassessment By Guyllaume Faucher; Christopher Hajzler; Martin Kuncl; Dmitry Matveev; Youngmin Park; Temel Taskin

  1. By: Roth, Felix
    Abstract: This contribution analyzes the impact of intangible capital on labor productivity growth across countries at the aggregate and sectoral levels by employing an econometric growth-accounting approach. First, our results show that intangible capital deepening accounts for around 50 percent of labor productivity growth at both the aggregate and sectoral level. Second, we find that this positive impact of intangible capital on productivity growth at both levels of aggregation is driven by investments in economic competencies, the only intangible group not covered in the national accounts. Third, our results reveal deep sectoral heterogeneities regarding investments and productivity effects of different intangible types. These findings have important implications for future EU industrial policies and are directly relevant to the EU's efforts to close its productivity gap with the US.
    Keywords: intangible capital,labor productivity growth,cross-country sectoral panel analysis,manufacturing,market services,EU
    JEL: C23 E22 L16 L60 L80 O47 O52
    Date: 2022
  2. By: Fernando M. Aragón (Simon Fraser University); Diego Restuccia (University of Toronto); Juan Pablo Rud (Royal Holloway, University of London)
    Abstract: We assess the extent and cost of misallocation in agriculture in less-developed countries comparing the analysis at the plot and farm levels. Using detailed data from Uganda, we show that the plot-level analysis leads to extremely large estimates of reallocation gains, even after adjusting for measurement error and unobserved heterogeneity. These results reflect two empirical limitations of the plot as unit of analysis: excess measurement error and near constant returns to scale production estimates. We find limited evidence of substantial measurement error at the farm level.
    Keywords: Plot, farm, misallocation, measurement error, agriculture, distortions
    JEL: O4
    Date: 2022–04
  3. By: Johannes Boehm (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science)
    Abstract: I study how supplier contracting frictions shape the patterns of intermediate input use and quantify the impact of these distortions on aggregate productivity. Using the frequency of litigation between US firms as a novel measure to capture the need for formal enforcement, I find a robust relationship between countries' input-output structure and their quality of legal institutions: in countries with high enforcement costs, firms have lower expenditure shares on intermediate inputs in sector pairs where US firms litigate frequently for breach of contract. A quantitative model shows that improvement of contract enforcement institutions would lead to sizeable welfare gains.
    Keywords: Contract enforcement costs,Contracting frictions,Transaction costs,Outsourcing,Aggregate productivity
    Date: 2020–06
  4. By: Marie Le Mouel
    Abstract: This Working Paper is an output from the MICROPROD project, which received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 822390. European economies exhibit the so-called ‘productivity puzzle, whereby investments’ in digital technologies and intangible assets have not delivered the hoped-for productivity gains. Explanations for this puzzle lie in the unequal ability of companies to make use of these technologies, and resulting patterns...
    Date: 2022–04
  5. By: William C. Horrace (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Hyunseok Jung (Department of Economics, University of Arkansas, Fayetteville, AR 72701); Yoonseok Lee (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244)
    Abstract: We apply the adaptive LASSO (Zou, 2006) to select a set of maximally efficient firms in the panel fixed-effect stochastic frontier model. The adaptively weighted L1 penalty with sign restrictions for firm-level inefficiencies allows simultaneous estimation of the maximal efficiency and firm-level inefficiency parameters, which results in a faster rate of convergence of the corresponding estimators than the least-squares dummy variable approach. We show that the estimator possesses the oracle property and selection consistency still holds with our proposed tuning parameter selection criterion. We also propose an efficient optimization algorithm based on coordinate descent. We apply the method to estimate a group of efficient police officers who are best at detecting contraband in motor vehicle stops (i.e., search efficiency) in Syracuse, NY.
    Keywords: Panel Data, Fixed-Effect Stochastic Frontier Model, Adaptive LASSO, L1 Regularization, Sign Restriction, Zero Inefficiency
    JEL: C14 C23 D24
    Date: 2022–03
  6. By: MIYAKAWA Daisuke; TAKIZAWA Miho
    Abstract: How can we evaluate the performance of the Japanese economy in terms of business activities? To answer this question, both the performances of the Japanese economy and that of other countries need to be measured under a common methodology and compared. Furthermore, such comparison should be done based not only on measures of productivity but also on the so-called "measures of business dynamism ". Those measures account for how numerous heterogeneous firms are growing and declining, how market concentrations change, how markups are evolving, and so on. Toward this end, we measure productivity and various determinants of business dynamism for Japanese firms using the "Basic Survey of Japanese Business Structure and Activities" and compare them with those of EU countries (CompNet 8th Vintage firm-level data), based on a common methodology. The comparison of those two sets of results for the period after 2000 reveals that while continuous productivity improvements were observed in several EU countries, productivity growth in Japan has been stagnating over the 2010s. Such improvement in EU countries is accompanied by the increase in allocative efficiency while the allocative efficiency in Japan has been deteriorating. We also find that the decline in capital intensity in Japan is pronounced.
    Date: 2022–03
  7. By: Olegs Krasnopjorovs (LU - University of Latvia); Konstantins Kovalovs (LU - University of Latvia)
    Abstract: This research study uses ORBIS microdata at the company level to analyse productivity of 167 thousand economically active Latvian companies over 2011-2018. The aim of the study is twofold-to find factors consistently associated with productivity at the company level; and to recommend possible criteria for companies to receive a state support (from the view of enhancing aggregate productivity in the long term). Our research results show that productivity of Latvian companies is positively related to their size, age, as well as location closer to Riga and other big cities. However, there is a substantial within-group variation in productivity between companies. Multivariate regression results show that location, size, age and economic sector explain only up to 19% of productivity differences between companies. In addition, distribution of companies by productivity has a positive skewness. This suggests that there is a small number of highly productive companies, while for most companies the productivity is lower than the average. Finally, we propose three criteria for companies to receive a state support: (1) high relative productivity given size, age, sector and location; (2) belonging to a group of companies with a higher probability of survival; (3) carrying out a significant part of economic activity in areas with a high unemployment rate.
    Keywords: productivity,micro data,ORBIS,company size,company age,company location
    Date: 2021–05–14
  8. By: Elodie Letort; Aude Ridier
    Abstract: The economic performance of organic dairy farms, especially during the transitional period, is not consensus in economics studies, depending on the method used, the type of indicators, the nature and scale of the performance indicator, the geographical location. We compare the economic and financial performance of both conventional and organic dairy farms based on a mixed effect panel data model estimated on 1,016 farm micro-data collected between 2007and 2018 in two departments of Brittany. As in other studies, we find that the herd size influences positively all economic and financial indicators. Even if the growth in assets is heterogeneous among organic farms, it is higher than in other farms, which decreases their return on assets. Finally, even if they share the same objective of food autonomy and sparing variable expenses, dairy farms based on grassland production system do not exhibit the same performance dynamics as organic farms.
    Keywords: organic farms, economical and financial performance, mixed effect model
    JEL: Q14 Q15 C23
    Date: 2022
  9. By: António Afonso; Ana Venâncio
    Abstract: We investigate the effect on municipality spending efficiency of a local property tax reform, which reduced in 2008 the upper limit of the property tax. We compute municipality efficiency scores via data Envelopment Analysis (DEA) from 2005 to 2011, and then we rely in a panel data set to estimate how the tax reform affected the efficiency scores. Results of the analysis show that average input efficiency scores declined from 0.575 before the tax reform to 0.488 after the tax reform. This change was transversal to municipalities that reduced the municipal property tax (IMI) and to the ones that maintained the tax rate. In addition, the IMI reform is linked to higher efficiency scores. In other words, the reduction in efficiency ends up being smaller for the municipalities that decreased the IMI tax rate.
    Keywords: public spending efficiency, local government, data envelopment analysis (DEA), local property tax reform
    JEL: C14 C23 H11 H21 H50
    Date: 2022
  10. By: Ladislav Mura (Pan-European University); Zuzana Hajduová (University of Economics in Bratislava)
    Abstract: The problem of identifying and quantifying the efficiency of accommodation units is currently a discussed issue. Recognition and identification of the most important aspects that increase the financial efficiency of a rapidly changing business environment, especially in a difficult period of economic and tourism bounce back is a key issue. Only the companies that adequately address the issue of their measurement and evaluation and are able to choose the right approach in this regard will win the competition. Our work focuses on the identification of key factors influencing the management of business entities. We carried out a detailed analysis of accommodation units in selected accommodation facilities at the regional level. We wanted to point out the differences within the individual regions of Slovakia. By applying the DEA method, we used individual models focused on inputs and outputs in order to determine the inefficient units in our research, and revealed its shortcomings and pointed out the way to improve the economic results of these research subjects.
    Keywords: DEA,models,correlation,regions,small and medium enterprises
    Date: 2021–06–30
  11. By: Ibirénoyé Honoré Romaric Sodjahin; Fabienne Femenia; Obafémi Philippe Koutchade; Alain Carpentier
    Abstract: Despite many benefits provided by diversified cropping systems, there is a dearth of empirical evidence on the economic relevance of their effects, mainly due to lack of information on the dynamics of farmers’ crop acreages. Our article contributes to fill this gap and, thereby, to shed light on a pair of apparently contradictory facts. European farmers tend to stick to specialized crop acreages despite agronomic experiments tending to show that crop diversification could reduce chemical input uses while maintaining or even enhancing arable crop yield levels. We provide estimates of the effects of previous crops and crop acreage diversity on yield and chemical input use levels based on a sample of 769 arable crop producers covering the Marne département in France from 2008 to 2014. Our farm level dataset combines cost accounting data, information on crop sequences as well as detailed soil and weather data. Our estimation approach relies on yield functions and input use models defined as systems of simultaneous equations. These models feature farm specific random parameters for accounting for unobserved heterogeneity across farms and farmers as well as for accommodating input use endogeneity in the considered empirical crop yield functions. We estimate pre crop and crop acreage diversity effects for four major crops in the area. Pre crops effects on yields are estimated relatively accurately and are generally consistent with the rankings provided by crop production experts. Estimated pre crop effects on input uses are small and insignificant from a statistical viewpoint despite our large sample, suggesting that pre crops don’t impact much chemical input requirements or/and that farmers tend to downplay these effects when deciding their chemical input use levels. Our results also show that crop acreage diversity positively impacts yield levels and tend to induce reductions in pesticide uses, herbicide uses in particular. Overall, our results demonstrate statistically significant though economically limited effects of pre crops and crop acreage diversity on crop gross margins. They also suggest that policy measures aimed to foster crop diversification are unlikely to significantly reduce chemical input uses on major crops if they are not supplemented by measures specifically aimed to reduce the uses of these inputs.
    Keywords: crop rotation effects, crop diversification, endogeneity, random parameter, SAEM algorithm
    JEL: Q12 C33 C63
    Date: 2022
  12. By: Kyle Boutilier; Thomas J. Carter; Xin Scott Chen; Eshini Ekanayake; Louis Poirier; Peter Shannon; Akash Uppal; Lin Xiang
    Abstract: We expect global potential output growth to increase from 2.7% in 2021 to 2.9% by 2024. Compared with the April 2021 assessment, global potential output growth is marginally slower. The current range for the US neutral rate is 2% to 3%, 0.25 percentage points higher than staff’s last assessment.
    Keywords: Interest rates; Monetary policy; Potential output; Productivity
    JEL: E1 E2 E4 E5 F0 O4
    Date: 2022–04
  13. By: Grégory Claeys; Marie Le Mouel; Giovanni Sgaravatti
    Abstract: This Working Paper is an output from the MICROPROD project, which received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 822390. This paper summarises the most important policy lessons from the research undertaken in the MICROPROD project, work package 4, related to the allocation of the factors of production, with a special focus on the weak dynamism of European small and medium-sized enterprises...
    Date: 2022–04
  14. By: Kerstin H\"otte; Melline Somers; Angelos Theodorakopoulos
    Abstract: Does technological change destroy or create jobs? New technologies may replace human workers, but can simultaneously create jobs if workers are needed to use these technologies or if new economic activities emerge. Furthermore, technology-driven productivity growth may increase disposable income, stimulating a demand-induced expansion of employment. To synthesize the existing knowledge on this question, we systematically review the empirical literature on the past four decades of technological change and its impact on employment, distinguishing between five broad technology categories (ICT, Robots, Innovation, TFP-style, Other). Overall, we find across studies that the labor-displacing effect of technology appears to be more than offset by compensating mechanisms that create or reinstate labor. This holds for most types of technology, suggesting that previous anxieties over widespread technology-driven unemployment lack an empirical base, at least so far. Nevertheless, low-skill, production, and manufacturing workers have been adversely affected by technological change, and effective up- and reskilling strategies should remain at the forefront of policy making along with targeted social support systems.
    Date: 2022–04
  15. By: Gregory P. Casey
    Abstract: I build a quantitative model of economic growth that can be used to evaluate the impact of environmental policy interventions on final-use energy consumption, an important driver of carbon emissions. In the model, energy demand is driven by directed technical change. Energy supply is subject to increasing extraction costs. The model is consistent with aggregate evidence on energy use, efficiency, and prices in the United States, as well as the standard balanced growth facts. I use the model to conduct several policy analyses. First, I examine the impact of energy taxes and compare the results to the standard Cobb-Douglas approach used in the environmental macroeconomics literature. Second, I investigate how the government can use energy taxes and R&D policy to implement the least-cost path that achieves an environmental target. Finally, I study the dynamic impacts of exogenous improvements in energy efficiency and R&D subsidies for energy efficiency, focusing on the role of rebound. All analyses highlight the importance of transition dynamics.
    Keywords: energy, climate change, directed technical change, growth
    JEL: H23 O33 O44 Q43 Q55
    Date: 2022
  16. By: Guyllaume Faucher; Christopher Hajzler; Martin Kuncl; Dmitry Matveev; Youngmin Park; Temel Taskin
    Abstract: We expect potential output growth to be lower in 2021 than anticipated in the April 2021 assessment. By 2025, growth is expected to reach 2.3%. We assess that the Canadian nominal neutral rate increased slightly to lie in the range of 2.00% to 3.00%.
    Keywords: Economic models; Interest rates; Labour markets; Monetary policy; Potential output; Productivity
    JEL: E2 E3 E4 E5
    Date: 2022–04

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