nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2023‒02‒20
twelve papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. A Geometric Analysis of Technological Heterogeneity in the Agricultural Sector: Evidence from Maize in Tanzania. By Nchare, Karim; Vitouley, Marcel; Kaila, Heidi; Liu, Yanyan
  2. Productivity and Product Markets in Korea: Evidence from Advanced Economies By Mr. Andrew J Swiston; Stella Tam
  3. Debt Maturity and Firm Productivity—The Role of Intangibles By Nakatani, Ryota
  4. Nexus between Digital Infrastructure, Productivity, and International Trade Participation: Firm-level evidence from India’s Unorganized Sector MSMEs By Neha Jain; Sugandha Huria
  5. Worker surveillance capital, labour share and productivity By Philippe Askenazy
  6. Estimating Nonparametric Conditional Frontiers and Efficiencies: A New Approach By Mastromarco, Camilla; Simar, Léopold; Van Keilegom, Ingrid
  7. Dispersion over the business cycle: passthrough, productivity and demand? By Carlsson, Mikael; Clymo, Alex; Joslin, Knut-Eric
  8. TFP growth, embeddedness, and Covid-19: a novel production model that allows estimating trade elasticities By Carrascal, André; Orea, Luis
  9. Unpacking Impact of COVID-19 on Vietnamese Firms: Evidence from a Novel Survey By Ms. Yuanyan S Zhang; Anh Thi Ngoc Nguyen; Thuy Dinh Pham; Nga Huong Phi; Duong Thuy Nguyen; Tuan Danh Duong; Ms. Era Dabla-Norris
  10. The Structural and Productivity Effects of Infrastructure Provision in Developed and Developing Countries By Boto-Garcia, David; Leoni, Veronica
  11. Tools to Promote Productivity in Finland By Koski, Heli; Maliranta, Mika
  12. Do well managed firms make better forecasts? By Bloom, Nicholas; Kawakubo, Taka; Meng, Charlotte; Mizen, Paul; Riley, Rebecca; Senga, Tatsuro; Van Reenen, John

  1. By: Nchare, Karim; Vitouley, Marcel; Kaila, Heidi; Liu, Yanyan
    Abstract: This paper presents a new framework to measure farm-level heterogeneity, and productivity change, and to study the rate and direction of technical change within an agricultural sector. Building on the seminal works of Hildenbrand (1981) and Dosi et al. (2016), we show how, while relaxing most of the standard assumptions from production theory, discrete geometry is an effective tool for productivity analysis and technical change in agricultural economics. We apply the framework to a rich panel data from maize farmers in Tanzania to investigate the dynamics of technical heterogeneity and agricultural productivity growth.
    Keywords: Agricultural and Food Policy
    Date: 2022–01–01
  2. By: Mr. Andrew J Swiston; Stella Tam
    Abstract: This paper constructs an industry-level dataset of productivity across advanced economies, showing that Korea’s labor productivity and total factor productivity levels are below the median of other advanced economies. We identify sizable industry-level productivity gaps in Korea with respect to the global frontier, especially in market-oriented services. Using the OECD’s Product Market Regulation (PMR) Indicators, we show that tighter PMRs slow industry-level productivity growth, and these effects occur across all areas of PMRs—state control, barriers to entrepreneurship, and barriers to trade and investment—and through several detailed indicators. These effects are transmitted through higher product prices and unit labor costs of industries exposed to regulation. The results confirm the potential for Korea to boost overall productivity and growth through PMR reforms, especially by lowering barriers in service and network sectors, reducing restrictions applying to trade and investment, and evaluating the scope of government involvement in the economy.
    Keywords: Korea; productivity; product markets; regulation; growth; labor productivity distribution; OECD product market regulation; regulation-productivity linkage; OECD PMR indicators structure; IMF Product Market Regulation; PMR indicator; productivity comparison; productivity measurement; Total factor productivity; Commodity markets; Labor productivity; Trade barriers; Global
    Date: 2022–10–28
  3. By: Nakatani, Ryota
    Abstract: Does the maturity of debt matter for productivity? Using data on Italian firms from 1997 to 2015, we study the relationship among debt maturity, productivity, and firm characteristics. We find that productivity is positively associated with short-term debt and negatively associated with long-term debt. This result supports the hypothesis that the less intense monitoring of firm performance and fewer liquidation fears stemming from the long maturity of debt causes a moral hazard, while short-term debt serves as a disciplinary device to improve firm performance in the short run. This effect is evident in small- and medium-sized enterprises and old firms. In contrast, large firms can utilize long-term financing to improve productivity through long-term investments. Firms improve productivity by purchasing intangible assets financed by short-term debt.
    Keywords: Debt maturity; Productivity; SMEs; Firm size; Firm age; Intangibles
    JEL: D22 D24 G32 O16 O34
    Date: 2023–01–28
  4. By: Neha Jain (Indian Institute of Foreign Trade (IIFT), New Delhi); Sugandha Huria (Indian Institute of Foreign Trade (IIFT), New Delhi)
    Abstract: The study investigates whether access to digital ways of conducting a business can enhance the productivity of the unorganized sector MSMEs in India, and hence, foster their participation in international trade. The analysis is conducted using the National Sample Survey’s (NSS) 73rd round on unincorporated non-agricultural Indian enterprises for the year 2015-16, covering approximately 2, 90, 000 firms, and performing separate analysis for both manufacturing and services firms. The key findings are: First, access to ICT infrastructure has a positive impact on firm-level productivity while controlling for firm-level characteristics. Second, the quantile regression analysis confirms the robust impact of digital assets across different levels of productivity. Third, the Probit Regression Model highlights the combined positive and significant impact of digital infrastructure and productivity on the international trade participation of an unorganized sector MSME. These findings can serve as a motivation for accelerating ‘bottom-up approach’ in the policy efforts towards better productivity and digital transformation of these firms, particularly for manufacturing MSMEs.
    Keywords: Digitalization, Productivity, MSMEs, Exports
    JEL: D24 F61 J24 L86 L81 O33
    Date: 2022
  5. By: Philippe Askenazy (CMH - Centre Maurice Halbwachs - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres)
    Abstract: In this paper, we propose a basic model with two types of capital: productive capital directly involved in the production process and capital devoted to monitoring workers. Surveillance capital intensifies workers' job strain, while wage recognition encourages their engagement. Firms face a double trade-off between the two types of capital and between incentives and labour costs. Under simple assumptions, up to a certain threshold, technological innovation improves productivity , wages and profits at the same pace, leading to a flat labour share in income. Then, once the threshold is breached, profit-maximization initiates a transfer from productive capital to monitoring tools. This progressive shift generates a decline in the labour share and a productivity slowdown, despite greater job strain. The model suggests the possibility of a third phase in which productivity and wages recover.
    Abstract: Ce document propose un modèle avec deux types de capital : le capital productif directement impliqué dans le processus de production et le capital consacré au suivi des travailleurs. Le capital de surveillance intensifie la pression sur l'emploi des travailleurs, tandis que la reconnaissance des salaires encourage leur engagement. Les entreprises sont confrontées à un double arbitrage entre les deux types de capital et entre les incitations et les coûts du travail. Sous des hypothèses simples, jusqu'à un certain seuil, l'innovation technologique améliore la productivité, les salaires et les profits au même rythme, ce qui conduit à une stagnation de la part du travail dans la valeur ajoutée. Ensuite, une fois le seuil franchi, la maximisation des profits amorce un transfert du capital productif vers les outils de suivi des travailleurs. Ce transfert progressif génère une diminution de la part du travail et un ralentissement de la productivité, malgré une plus grande pression professionnelle. Le modèle suggère la possibilité d'une troisième phase au cours de laquelle la productivité et les salaires se redressent.
    Keywords: declining labour share, productivity slowdown, effort-reward imbalances, surveillance *
    Date: 2022–01–01
  6. By: Mastromarco, Camilla; Simar, Léopold (Université catholique de Louvain, LIDAM/ISBA, Belgium); Van Keilegom, Ingrid
    Abstract: In production theory, conditional frontiers and conditional efficiency measures are a flexible and appealing approach to consider the role of environmental variables on the production process. Direct approaches estimate non-parametrically conditional distribution functions requiring smoothing techniques and the use of selected bandwidths. The statistical literature produces way to derive bandwidths of optimal order, by using e.g. least-squares-cross-validation techniques. However, it has been shown that the resulting order may not be optimal when estimating the boundary of the distribution function. As a consequence the direct approaches may suffer from some statistical instability. In this paper we suggest a full nonparametric approach which avoids the problem of estimating these bandwidths, by eliminating in a first step the influence of the environmental factors on the inputs and the outputs. By doing this we produce “pure” inputs and outputs which allow to estimate a “pure” measure of efficiency, more reliable for ranking the firms, since the influence of the external factors have been eliminated. This can be viewed as an extension of the use of location-scale models (implying some semi-parametric structure) to full nonparametric models, based on nonseparable, nonparametric models. We are also able to recover the frontier and efficiencies in original units. We describe the method, its statistical properties and we show in some Monte-Carlo simulations, how our new method dominates the traditional direct approach.
    Keywords: Nonparametric frontier models ; Environmental factors ; Conditional efficiency ; Robust estimation of frontiers
    JEL: C13 C14 C49
    Date: 2022–11–01
  7. By: Carlsson, Mikael (Uppsala universitet); Clymo, Alex (University of Essex); Joslin, Knut-Eric (Kristiania University College)
    Abstract: We characterize the dispersion of firm-level productivity and demand shocks over the business cycle using Swedish microdata including prices and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than productivity dispersion in recessions. Productivity shocks pass through incompletely to prices and have limited effect on sales dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneous-firm model matching the micro facts, demand dispersion has unambiguously negative effects on output via increased uncertainty and a “wait and see” channel. Productivity dispersion does not generate “wait and see” effects, but affects output negatively by inducing markup dispersion.
    Keywords: demand estimation; productivity; variable markups; business cycles; dispersion; uncertainty; passthrough; adjustment costs
    JEL: D21 D22 D81 E32 L11
    Date: 2023–01–19
  8. By: Carrascal, André; Orea, Luis
    Abstract: The main contribution of this paper is the proposal of a new method to estimate trade elasticities based on a production model where trade elasticities and technological parameters are estimated simultaneously. Our empirical model, inspired by the theoretical framework introduced by Caliendo et al (2018) to study the propagation of productivity shocks, also permits assessing whether their central equation aimed at understanding the sources of productivity change, is supported by the data. Furthermore, using econometric techniques, our paper examines trade-related productivity effects that have rarely been examined in the literature on productivity growth decomposition. The proposed model provides a common analytical framework for an empirical examination of several issues that both traditionally and more recently have attracted the interest of many academics and policy/makers, namely TFP growth, embeddedness, and Covid-19. We use the World Input-Output Database (WIOD) for the period 2000-2014 to compute most of the relevant variables employed in these applications.
    Date: 2022
  9. By: Ms. Yuanyan S Zhang; Anh Thi Ngoc Nguyen; Thuy Dinh Pham; Nga Huong Phi; Duong Thuy Nguyen; Tuan Danh Duong; Ms. Era Dabla-Norris
    Abstract: Using a unique representative panel survey of Vietnamese enterprises in 2020, we find that the pandemic and associated government support package had a heterogenous impact across firms. The government support package, particularly tax cuts and deferrals, helped alleviate short term stress, but tight ineligibility criteria and cumbersome procedures impacted take-up. Econometric analysis suggests that the likelihood of accessing support was associated with firm size, with larger firms more likely to receive support compared to smaller firms, even after controlling for sector, firm ownership and financial health. Credit support was effective in alleviating liquidity constraints and allaying firm pessimism only for large firms. Interestingly, firms experiencing sales losses and those with lower pre-crisis productivity were more likely to resort to digitalization, suggesting that the pandemic could help narrow productivity gaps.
    Keywords: COVID-19; policy support; firms’ coping strategies; digitalization; coping strategy; government support package; credit support; firm pessimism; self-coping strategy; Credit; Labor costs; Productivity; Europe; Global
    Date: 2022–09–30
  10. By: Boto-Garcia, David; Leoni, Veronica
    Abstract: Despite volcanic eruptions are among the most detrimental phenomena for tourism activities, few studies have explored their effects on tourism arrivals. This study investigates the dynamic effects of Cumbre Vieja eruption (La Palma Island, Spain) on domestic tourism demand at the municipal level. By exploring mobile-phone geo-position data in a quasi-experimental setting, we analyse the variation in local, peninsular and domestic tourists in La Palma municipalities as compared to non-treated municipalities in other islands in the Canary Archipelago after the eruption. Our event study estimates point to an average drop of about 41% in domestic tourism during the eruption, with a further decrease of around 55% in the following four months. Our findings offer valuable insights about island tourism-dependent economies’ resilience to natural disasters.
    Date: 2022
  11. By: Koski, Heli; Maliranta, Mika
    Abstract: Abstract We present an overview of the recent productivity development in Finland. In particular, we focus on what distinguishes companies at the frontier of productivity from other companies. The measures needed to support the development of Finnish companies into high-productivity companies are assessed. Innovation policy measures that promote the creation of innovations that benefit society at large and the dissemination of knowledge in the economy have an exceptionally high national economic productivity growth potential. Such actions include: 1. Allocation of public R&D subsidies i) to companies that have the highest capabilities to produce radical innovation that benefit society more broadly and ii) to projects that require cooperation between companies and universities. 2. Allocation of public funding to the R&D projects taking place in the centers of expertise. 3. Strengthening funding aimed at quantitative and qualitative improvements of basic research and teaching in higher education institutions. 4. Promotion of work-based immigration (accelerating permit processes, financial incentives for skilled immigrants). 5. Ensuring that the product and labor markets are well-functioning and provide an operating environment that encourages companies to make R&D investments and other intangible investments.
    Keywords: Productivity, Economic growth, R&D, Innovation policy
    JEL: L16 O3 O4
    Date: 2023–02–08
  12. By: Bloom, Nicholas; Kawakubo, Taka; Meng, Charlotte; Mizen, Paul; Riley, Rebecca; Senga, Tatsuro; Van Reenen, John
    Abstract: We link a new UK management survey covering 8, 000 firms to panel data on productivity in manufacturing and services. There is a large variation in management practices, which are highly correlated with productivity, profitability and size. Uniquely, the survey collects firms' micro forecasts of their own sales and also macro forecasts of GDP. We find that better managed firms make more accurate micro and macro forecasts, even after controlling for their size, age, industry and many other factors. We also show better managed firms appear aware that their forecasts are more accurate, with lower subjective uncertainty around central values. These stylized facts suggest that one reason for the superior performance of better managed firms is that they knowingly make more accurate forecasts, enabling them to make superior operational and strategic choices.
    Keywords: management; productivity; expectations; forecasting; ES/S012729/2
    JEL: L20 M20 O32 O33
    Date: 2022–01–05

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