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on Efficiency and Productivity |
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Issue of 2022‒11‒07
twenty papers chosen by |
| By: | Simar, Léopold (Université catholique de Louvain, LIDAM/ISBA, Belgium); Wilson, Paul (Clemson University) |
| Abstract: | This paper discusses early work on productivity change by Färe and Grosskopf and their co-authors. We illustrate the use of recent statistical results by revisiting and updating Färe et al. (1994, AER). We analyze 17 OECD countries, estimating productivity change and its sources as measured by Malmquist indices and various decompositions. We describe and use recent theoretical results to make inferences, thereby quantifying what is learned from the data as opposed to merely providing point estimates. |
| Keywords: | DEA ; efficiency ; productivity ; Malmquist index ; Nonparametric inference |
| Date: | 2022–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:aiz:louvad:2022028&r= |
| By: | G. Jacob Blackwood; Cindy Cunningham; Matthew Dey; Lucia Foster; Cheryl Grim; John Haltiwanger; Rachel Nesbit; Sabrina Wulff Pabilonia; Jay Stewart; Cody Tuttle; Zoltan Wolf |
| Abstract: | An important gap in most empirical studies of establishment-level productivity is the limited information about workers’ characteristics and their tasks. Skill-adjusted labor input measures have been shown to be important for aggregate productivity measurement. Moreover, the theoretical literature on differences in production technologies across businesses increasingly emphasizes the task content of production. Our ultimate objective is to open this black box of tasks and skills at the establishment-level by combining establishment-level data on occupations from the Bureau of Labor Statistics (BLS) with a restricted-access establishment-level productivity dataset created by the BLS-Census Bureau Collaborative Micro-productivity Project. We take a first step toward this objective by exploring the conceptual, specification, and measurement issues to be confronted. We provide suggestive empirical analysis of the relationship between within-industry dispersion in productivity and tasks and skills. We find that within-industry productivity dispersion is strongly positively related to within-industry task/skill dispersion. |
| Keywords: | productivity, skills, tasks, manufacturing |
| JEL: | D24 J24 J31 L60 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:22-44&r= |
| By: | Kneip, Alois (Universität Bonn); Simar, Léopold (Université catholique de Louvain, LIDAM/ISBA, Belgium); Wilson, Paul W. (Clemson University) |
| Abstract: | Nonparametric envelopment estimators are often used to estimate the attainable sets and its efficient boundary and to assess efficiency and changes in productivity. Kneip et al. (2015, 2016) provide asymptotic theory enabling inference about expected efficiency and testing constant versus variable returns to scale using these estimators, and Kneip et al. (2021) provide asymptotic results that can be used to make inference about expected changes in productivity measured by Malmquist indices. All of these results require convexity of the attainable set, but in a number of situations this assumption is questionable. Kneip et al. (2016) also provide a test of convexity versus non-convexity of a production set, and convexity is rejected in several recent studies. This paper extends the results mentioned above to allow for possibly nonconvex technologies. Properties of a nonparametric envelopment estimator of distance to the boundary of the cone spanned by a possibly non-convex attainable set are derived. These new results are then extended to make inference about geometric means of Malmquist indices and to test constant versus non-constant returns to scale when the production set is not convex. |
| Keywords: | Non-convex production sets ; FDH ; hypothesis test ; returns to scale ; Malmquist index ; productivity change |
| JEL: | C12 C14 C18 |
| Date: | 2022–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:aiz:louvad:2022024&r= |
| By: | Dieppe,Alistair Matthew,Matsuoka,Hideaki |
| Abstract: | This paper investigates how the sector-specific source or the changing sectoral composition of labor productivity has contributed to aggregate beta convergence, using a newly constructed eight-sector database. The main findings are twofold. First, both within and sectoral reallocation have become important drivers of aggregate convergence in labor productivity. Second, agricultural productivity growth has been a significant contributor to aggregate convergence, whereas catch-up in other sectors has only contributed a small amount to convergence. The strong growth of the agriculture sector has been the most important driver of aggregate productivity convergence even though agricultural productivity itself in low-income countries is weakly converging to that in advanced economies. |
| Keywords: | Food Security,Labor Markets,Transport Services,Common Carriers Industry,Food&Beverage Industry,Plastics&Rubber Industry,Business Cycles and Stabilization Policies,Construction Industry,General Manufacturing,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,International Trade and Trade Rules |
| Date: | 2021–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9767&r= |
| By: | Fabrizio Leone |
| Abstract: | This paper shows that multinational enterprises (MNEs) spur the adoption of industrial robots. First, I document a positive and robust correlation between multinational production and robot adoption using a new cross-country industry-level panel. Second, using detailed data about Spanish manufacturing, I combine a difference-in-differences approach with a propensity score reweighing estimator and provide evidence that firms switching from domestic to foreign ownership become about 10% more likely to employ robots. The ability of expanding into foreign markets via the parental network is the key driver of the adoption choice. An empirical model of firm investment reveals that MNEs generate significant industry-level productivity gains but decreases the labor share by boosting robot adoption. However, the first effect is one order of magnitude larger than the second. These results provide new evidence about the efficiency versus equity trade-off that policymakers face when attracting MNEs. |
| Keywords: | foreign ownership, industrial robots, total factor productivity, factor-biased productivity, labor share |
| Date: | 2022–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1854&r= |
| By: | Manghnani,Ruchita; Meyer,Birgit Elisabeth; Saez,Juan Sebastian; Van Der Marel,Erik Leendert |
| Abstract: | This paper explores the relationship between the use of service inputs, participation in globalvalue chains, and firm productivity. Services play the role of both an intermediate input in production and acoordinator. Using a detailed Indian firm-level data set from 1990–2017, the paper estimates the productivity premiumassociated with varying depths of global value chain integration and different intensities and types of servicesused in the production. The study finds that firms in global value chains have a productivity premium between 13 and 22percent relative to domestic firms, with some variation based on the depth of global value chain integration and thesector to which the firm belongs. Both the type of service inputs used (composition of services) and the origin ofservices (whether sourced domestically or from abroad) matter for firm performance. While higher aggregate serviceinput use (as captured by the share of expenditure on service inputs) is not necessarily associated with anincrease in productivity, increased use of complex services and information technology services is associated withhigher productivity. The use of imported services is associated with higher productivity. Moreover, firms thatare more deeply integrated in global value chains benefit more from importing services. |
| Keywords: | Food & Beverage Industry,Construction Industry,Plastics & Rubber Industry,Business Cycles and Stabilization Policies,Common Carriers Industry,General Manufacturing,Textiles, Apparel & Leather Industry,Pulp & Paper Industry,International Trade and Trade Rules,Industrial and Consumer Services and Products,Transport and Trade Logistics,Financial Sector Policy |
| Date: | 2021–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9814&r= |
| By: | Iimi,Atsushi |
| Abstract: | Transport infrastructure is an important driving force for economic growth. Africa has been lagging behind in the global manufacturing market. Among others, infrastructure is often an important constraint. The paper reexamines the impacts of transport infrastructure on firm productivity in Mozambique. A conventional cost function is estimated with two rounds of firm data collected in 2007 and 2018. It is found that improved transport connectivity, particularly access to a port, has a positive impact on firm production. Firm inventory is also an important determinant of firm productivity. Over the long term, agglomeration economies are also found to be significant and associated with port accessibility. These findings are consistent with the fact that the Government of Mozambique heavily invested in the primary road network during the first half of the 2010s. The improved transport network is considered to have contributed to the country’s robust economic growth in the industrial and service sectors until the mid-2010s. |
| Keywords: | Transport Services,Food&Beverage Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,Energy Policies&Economics,Energy and Mining,Energy and Environment,Energy Demand |
| Date: | 2021–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9727&r= |
| By: | Grover,Arti Goswami; Maloney,William F. |
| Abstract: | Recent literature suggests that the positive impact of population density on wages, thecanonical measure of agglomeration effects, is multiples higher in developing countries than in advanced economies.This poses an urban productivity puzzle because on-the-ground observations do not suggest that cities indeveloping countries function especially well or are conducive to enhanced productivity. This paper usesmanufacturing censuses from four countries at differing levels of income that allow separating plant output quantityfrom prices. It shows that higher wage elasticities with respect to density are due to higher marginal costs, andagglomeration elasticities of efficiency, physical total factor productivity, are in fact far lower in developingcountries. Further, congestion costs decrease with country income. Both are consistent with often low rates ofstructural transformation that make cities in developing countries so-called “sterile agglomerations,” which arepopulous but not efficient. |
| Date: | 2022–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9977&r= |
| By: | Fukase,Emiko; Kim,Yeon Soo; Chiarella,Cristina Andrea |
| Abstract: | Previous literature found overwhelming evidence of an agricultural gender gap in favorof male farmers. The case of Sri Lanka is unique as agricultural productivity, measured by yield per unit ofland, is 25.4 percent higher among female farmers than male farmers. Using the nationally representative 2016 Sri LankaHousehold Income and Expenditure Survey and the Oaxaca-Blinder decomposition technique, the paper exploresthe sources of this unconditional female productivity advantage. The analysis finds that the smaller plot sizecultivated by women is the leading source of female productivity advantage, reflecting the inverse relationshipbetween cultivated area and productivity. However, this productivity advantage does not translate into women’shigher crop earnings. Another important source is the gendered pattern of crop mix as women tend to cultivate morehigh-value, export-oriented crops, while men are more likely to grow paddy with low productivity. Once controlling forplot size and crop mix, a conditional male productivity advantage emerges, reflecting men’s greater access toagricultural resources and potentially an unequal pattern of division of labor associated with social and gender norms.Policies to promote equitable access to resources and address other constraints to women’s productivity inagriculture continue to be important in promoting gender equality. |
| Date: | 2022–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:10025&r= |
| By: | Cusolito,Ana Paula,Garcia Marin,Alvaro Felipe,Maloney,William F. |
| Abstract: | This paper employs a matched firm production/innovation panel data set from Chile to explore the response of firm innovation to the increased competition arising from the China shock. In addition to covering a wider range of innovation inputs and outputs than previously possible, the data allow generating measures of markups and efficiency (physical total factor productivity) that correspond more closely to the concepts of rents and technological leadership envisaged in the Schumpeterian literature. Except for the 10 percent most productive plants, increased competition depresses most measures of innovation. Falling rents exacerbate declines among laggards, while rising rents further increase innovation among leaders. |
| Keywords: | International Trade and Trade Rules,Food&Beverage Industry,Business Cycles and Stabilization Policies,Pulp&Paper Industry,General Manufacturing,Construction Industry,Plastics&Rubber Industry,Textiles, Apparel&Leather Industry,Common Carriers Industry,Real&Intellectual Property Law,Social Policy,Regulatory Regimes,Legal Products,Common Property Resource Development,Intellectual Property Rights,Legal Reform,Legislation,Judicial System Reform,Trade and Services,Financial Sector Policy |
| Date: | 2021–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9757&r= |
| By: | Paul,Saumik; Raju,Dhushyanth |
| Abstract: | The movement of workers from the farm sector to a more productive nonfarm sector has failed to generate significant gains in labor productivity in recent decades in many developing countries. This paper offers a new perspective on the barriers to growth-enhancing structural transformation, combining structural modeling with enterprise census data from Ghana. The paper argues that subnational differences in the intersectoral productivity gap between the nonfarm informal and formal sectors constrain the productivity gain from structural transformation. In Ghana, intersectoral productivity gaps among the richer regions are on average three times larger than among the poorer regions. The disparity in regional intersectoral productivity gaps is modeled as reflecting the disparity in the regional misallocation of labor between the informal and formal sectors. Misallocation is identified as the output wedge between the informal and formal sectors. Simulations suggest that a more productive nonfarm informal sector reduces the disparity in regional intersectoral productivity gaps and, in turn, increases national productivity and the contribution of structural transformation to national productivity. For example, a 90-percent reduction in the disparity in regional intersectoral productivity gaps raises Ghana’s national aggregate productivity by 11.9 percent and the contribution of structural transformation to productivity by 19.7 percent. |
| Keywords: | Labor Markets,Food Security,Employment and Unemployment,International Trade and Trade Rules |
| Date: | 2021–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9683&r= |
| By: | Ali,Daniel Ayalew; Deininger,Klaus W. |
| Abstract: | The importance of well-functioning land markets for structural transformation via labormovements to the non-agricultural sector, growth in farm size, and the ability to use land as collateral for creditand has long motivated Government efforts at reducing the transaction costs of registering and transferring land andsupporting large farm formation. Rigorous evidence on the effect of such measures has, however, been scant. This paperexplores the impact of institutional arrangements on productivity for a representative sample of 3,000 largefarms in Zambia, one of the earliest African adopters of such policies to close this gap. Instrumental-variable (IV)regressions suggest title has no effect on productivity, investment, or credit access and reduces rather thanimproves rental market participation. Measures to harness Zambia’s potential include improving title quality throughexclusive use of digital registries; imposition of a land tax on state land to incentivize productive rather thanspeculative land use and cancel outdated legacy documents; and greater involvement of traditional authorities in recordmaintenance and land management, possibly via land tax revenue sharing. |
| Keywords: | Land Administration,Food Security,Agricultural Economics |
| Date: | 2021–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9702&r= |
| By: | Konté,Maty; Kouame,Wilfried Anicet Kouakou; Mensah,Emmanuel Buadi |
| Abstract: | This paper investigates the effects of financial sector, product market, and trade reforms on labor productivity growth and its two components—the intra-sectoral (within) and inter-sectoral (between) components—in a sample of developing countries over 1975–2005. The paper finds that most of the past trade, product, and financial sector reforms have increased the growth rate of labor productivity. In particular, countries that are further away from the technology leader tend to benefit more from structural reforms than countries closer to the technology frontier. Looking at the subcomponents of labor productivity growth, the paper finds that structural reforms work mostly through the intra-allocative efficiency channel but not through the inter-allocative efficiency channel. The intra-sectoral component is the main driver of the impacts of reforms on labor productivity growth, with a contribution between 76 and 96 percent. |
| Keywords: | Labor Markets,International Trade and Trade Rules,Financial Sector Policy,Macroeconomic Management,Food Security |
| Date: | 2021–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9733&r= |
| By: | Rocco Macchiavello; Ameet Morjaria |
| Abstract: | Well-functioning markets allocate assets to owners that improve firms' management and performance. We study the effects of ownership changes on coffee mills in Rwanda - an industry in which managing relationships with farmers and seasonal workers is important and that has seen many ownership changes in recent years. We combine administrative data, a survey panel of mills and an original survey of acquirers that allows us to construct acquirer-specific and target-specific control groups. A difference-in-differences design reveals that ownership changes do not improve performance unless the mill is acquired by a foreign firm. Our preferred interpretation - supported by detailed survey evidence that considers alternative hypotheses - is that foreign firms successfully implement management changes in key operational areas. Upon acquisition, both domestic and foreign owned mills attempt to implement similar changes, but domestic firms face resistance from workers and farmers. Domestic owners have relationships with their local communities, which can create opportunities to establish new mills and acquire existing ones. However, these same relationships create pressure to maintain status-quo relational arrangements, which makes it harder to implement managerial changes. |
| Keywords: | management, performance, market reforms, coffee, Rwanda |
| Date: | 2022–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1864&r= |
| By: | Muzi,Silvia; Jolevski,Filip; Ueda,Kohei; Viganola,Domenico |
| Abstract: | This paper examines whether the economic crisis induced by the COVID-19 pandemic exhibits a Schumpeterian “cleansing” of less productive firms. Using firm-level data for 31 economies, the study finds that less productive firms have a higher probability of permanently closing during the crisis, suggesting that the process of cleansing out unproductive arrangements may be at work. The paper also uncovers a strong and negative relationship between firm exit and innovation and digital presence, especially for small firms, confirming the relevance of the ability to adapt to market conditions as a determinant of firm survival. Finally, the study finds evidence of a negative relationship between firm exit and a burdensome business environment, as well as between firm exit and age. |
| Keywords: | Labor Markets,Financial Sector Policy,Business Environment,Food&Beverage Industry,Plastics&Rubber Industry,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing |
| Date: | 2021–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9671&r= |
| By: | Burger,Martijn; Ianchovichina,Elena; Akbar,Prottoy Aman |
| Abstract: | Using geo-coded, firm-level data on more than 51,000 establishments in 649 metropolitan areas in98 developing economies, from the World Bank’s Enterprise Surveys and a new global database on city-level mobility andcongestion, this paper estimates the “pure” firm productivity gains of urban density, net of negativeexternalities associated with limited mobility, crime, and pollution. The results suggest that the average size ofagglomeration economies in the developing world is comparable to the one observed in advanced countries, butthe magnitude of the benefits of density on firm productivity substantially varies across firms. Returns tourban density are higher for firms operating in the tradables sector, exporters, foreign-owned firms, largerfirms, and more experienced firms. Agglomeration economies are lost through both limited uncongested mobility andcongestion, but the latter has a stronger negative effect on agglomeration economies and reduces relatively more theagglomeration benefits of firms in the non-tradables sector than those producing tradables. |
| Keywords: | Labor Markets,Common Carriers Industry,Food & Beverage Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Plastics & Rubber Industry,Textiles, Apparel & Leather Industry,Pulp & Paper Industry,Intelligent Transport Systems,Transport Services,Crime and Society |
| Date: | 2022–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9954&r= |
| By: | Krüger, Jens |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:130825&r= |
| By: | Riccardo Gianluigi Serio; Maria Michela Dickson; Diego Giuliani; Giuseppe Espa |
| Abstract: | The transition to more environmentally sustainable production processes and managerial practices is an increasingly important topic. Many industries need to undergo radical change to meet environmental sustainability requirements; the tourism industry is no exception. In this respect, a particular aspect that needs further attention is the relationship between airport performances and investments in environmental sustainability policies. This work represents a first attempt to provide empirical evidences about this relationship. Through the application of a non-parametrical method, we first assess the efficiency of the Italian airports industry. Secondly, we investigated the relationship between airports performance and management commitment toward the ecological transition using a Tobit regression model. The results show that airports' adherence to formal multi-year ecological transition programs has a positive and consistent impact on their performance. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.02736&r= |
| By: | Abreha,Kaleb Girma; Choi,Jieun; Kassa,Woubet; Kim,Hyun Ju; Kugler,Maurice David |
| Abstract: | This paper investigates whether enhanced access to mobile communications, including internet, primarily through smart phones, increases competition as price information is more widely available to customers—both households and firms. The exogenous shock to identify these impacts is the transition from 2G to the 3G broadband network standard in 2008, and the induced changes in the geographic variation across districts of data plan availability for households. The operational mechanism is that better household and firm telecommunications access can close information asymmetry gaps between buyers and sellers, with increased competition leading to improved firm performance. Lower markups and reduced price dispersion can result from better incentives for firms to preserve and grow market share. And as price competition squeezes profit margins, there are more incentives for firms to reduce costs—inducing higher total factor productivity growth. Improved firm performance can generate jobs and economic transformation. Indeed, faster productivity growth, due to enhanced access for buyers to mobile telecommunications, can translate into higher formal employment and wages. One open question is whether the potential competition, driven by the increased mobile telecommunications access of buyers, which help them have the best alternative prices at their fingertips, will also impact export-oriented companies. The prior is that the firm performance improvement effect would be more salient for firms mostly focused on local markets. The primary data sources are manufacturing firm census data and household expenditure survey data across woredas (districts or counties) in Ethiopia. First, the paper investigates the relation between expanded access with the 3G network to price information through mobile phones (measured at the woreda level as share of households with substantive expenditure to access data through smartphones) and firm performance measures (markups, total factor productivity, labor productivity, wage growth, wage gaps and employment growth.), across districts with different shares of mobile telecommunication and data plan penetration subscription. The paper estimates models with difference-in-differences and triple differences. The evidence is consistent with competition intensification after the improvement in access to mobile communication due to the 3G network rollout. In particular, markups were reduced and there was higher growth in productivity, wages, and employment. |
| Keywords: | Food&Beverage Industry,General Manufacturing,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,Plastics&Rubber Industry,Information Technology,Telecommunications Infrastructure,Labor Markets |
| Date: | 2021–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9752&r= |
| By: | Mohajan, Devagit; Mohajan, Haradhan |
| Abstract: | This article tries to discuss profit maximization policies by using four variable inputs, such as capital, labor, principal raw materials, and other inputs in an industry, where mathematical economic models are applied by considering budget constraint. For the sustainable production, every industry should apply scientific method, such as mathematical techniques to obtain more accurate results. In the study Cobb-Douglas production function is analyzed with detail mathematical analysis. The sensitivity analysis is included in the operation to show profit maximization that is a pivotal goal of the industry. The economic predictions of future production are provided through the comparative statics to become sure of profit maximization before starting of production in the industry. In the study Lagrange multiplier technique is applied to achieve optimal result in every step of industrial operation. |
| Keywords: | Lagrange multiplier, Cobb-Douglas production function, profit maximization |
| JEL: | C3 C61 C67 D6 L11 L9 |
| Date: | 2022–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114675&r= |