nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2023‒04‒03
eleven papers chosen by

  1. Evaluating horizontal mergers in Swedish district courts using plant capacity concepts: with a focus on nonconvexity By Xiaoqing Chen; Kristiaan Kerstens
  2. Wages and productivity in Argentinian manufacturing: A structuralist and distributional firm-level analysis By Gómez, María Celeste; Virgillito, Maria Enrica
  3. When Did Growth Begin? New Estimates of Productivity Growth in England from 1250 to 1870 By Bouscasse, P.; Nakamura, E.; Steinsson, J.
  4. The Mystery of productivity By Anum Shoaib Abbasi
  5. The role of product digitization for productivity By Schubert, Torben; Ashouri, Sajad; Deschryvere, Matthias; Jäger, Angela; Visentin, Fabiana; Cunningham, Scott; Hajikhani, Arash; Pukelis, Lukas; Suominen, Arho
  6. Foreign Affiliates versus Domestic Firms in the Information and Communication Services Sector in Central and Eastern Europe By Svilena Mihaylova
  7. Efficiency in European Air Traffic Management -- A Fundamental Analysis of Data, Models, and Methods By Thomas Standfuss; Georg Hirte; Michael Schultz; Hartmut Fricke
  8. Should we adjust health expenditure for age structure on health systems efficiency? A worldwide analysis By Santos, João Vasco; Martins, Filipa Santos; Pestana, Joana; Souza, Júlio; Freitas, Alberto; Cylus, Jonathan
  9. Do efficiency and equity move together? Cross-dynamics of Health System performance and Universal Health Coverage By Pavitra Paul; Ulrich Nguemdjo; Armel Ngami; Natalia Kovtun; Bruno Ventelou
  10. Determinants of Performance in European ATM -- How to Analyze a Diverse Industry By Thomas Standfuss; Georg Hirte; Frank Fichert; Hartmut Fricke
  11. Efficient scale and scope of business models used in municipal solid waste management By Di Foggia, Giacomo; Beccarello, Massimo

  1. By: Xiaoqing Chen (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Kristiaan Kerstens (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This contribution investigates the effects of horizontal mergers and acquisitions on the plant capacity utilisation of the Swedish district courts over the periods 2000-2017. More specifically, we empirically demonstrate the decomposition of input-oriented and output-oriented technical efficiency by incorporating several concepts of plant capacity utilisation. Moreover, we also explore the impact of convexity on input-oriented and output-oriented measures of plant capacity in the short-run scenario in an attempt to discover the potential rationale behind the merger wave. To the best of our knowledge, we are the first to assess horizontal mergers by employing plant capacity utilisation concepts. The results indicate that the horizontal mergers improve capacity utilisation. Furthermore, the nonconvex frontier method provides a more conservative estimate of plant capacity changes of this merger wave.
    Keywords: Data envelopment analysis, free disposal hull, plant capacity utilisation, horizontal mergers and acquisitions
    Date: 2022–11–19
  2. By: Gómez, María Celeste; Virgillito, Maria Enrica
    Abstract: Wages and productivity represent two of the most relevant variables to consider in economic development. Given the low productivity levels that emerging countries reveal, the accumulation of productive capabilities and a narrower dispersion across sectors would enable emerging countries to overcome the middle-income trap. Yet, this positive trend in productivity should translate into higher wages. Thus, we pose the following questions applied to a middle-income trapped country: is there a link between labour productivity and wages in the Argentine manufacturing sector? Does it differ across techno-productive classes or wage levels? Which factors affect this nexus, considering premature deindustrialisation? Using a firm-level dataset from 2010 to 2016, we perform quantile regression estimates to evaluate the link between productivity and wages across the conditional wage distribution among manufacturing firms. Based on a structural analysis, we identify the differences in these elasticities at 2-ISIC code levels and across Pavitt taxonomies. Our results confirm a positive, but extremely low, pass-through between productivity and wages in the Argentinian manufacturing firms, different across sectors according to their techno-productive capabilities, robust under different empirical strategies.
    Keywords: Gains from productivity, Development, Asymmetries
    JEL: J31 D24 L6 O14 C21
    Date: 2023
  3. By: Bouscasse, P.; Nakamura, E.; Steinsson, J.
    Abstract: We provide new estimates of the evolution of productivity in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. We develop and implement a new methodology for estimating productivity that accounts for these Malthusian dynamics. In the early part of our sample, we find that productivity growth was zero. Productivity growth began in 1600—almost a century before the Glorious Revolution. We estimate productivity growth of 3% per decade between 1600 and 1760, which increased to 6% per decade between 1770 and 1860. Our estimates attribute much of the increase in output growth during the Industrial Revolution to a falling land share of production, rather than to faster productivity growth. Our evidence helps distinguish between theories of why growth began. In particular, our findings support the idea that broad-based economic change preceded the bourgeois institutional reforms of 17th century England and may have contributed to causing them. We estimate relatively weak Malthusian population forces on real wages. This implies that our model can generate sustained deviations from the “iron law of wages†prior the Industrial Revolution.
    JEL: N13 O40 J10
    Date: 2023–03–07
  4. By: Anum Shoaib Abbasi (M.Phil Economics, Quaid-i-Azam, University, Islamabad.)
    Abstract: The level of productivity is the foundational factor in determining the standard of living. Increasing productivity could allow people to get more in a short time efficiently. The supply arises with the productivity resulting in decreased real prices, lower unemployment, and increasing real wages. However, productivity needs a technological push to get into its form while this technological push needs lower consumption and higher savings and investments that could help in increasing productivity.
    Date: 2022
  5. By: Schubert, Torben; Ashouri, Sajad; Deschryvere, Matthias; Jäger, Angela; Visentin, Fabiana (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn); Cunningham, Scott; Hajikhani, Arash; Pukelis, Lukas; Suominen, Arho
    Abstract: Digitalization is considered an important driver of the unravelling societal and economic transformations. However, holding both promises and challenges, its effects on the performance of individual firms are still underexplored. In this paper, we recognize that digitalization may take many shapes and try isolating the effects specifically of product digitization on firm level labour productivity. Our analyses are based on a large Europe-wide unique dataset combining structured information from ORBIS and PATSTAT with novel web-scraped information on digitalization in firms involved in high-tech manufacturing. We show that digitalization benefits productivity. However, the effect appears to result exclusively from product digitization, while a general digital intensity measure turned out to be insignificant. Moreover, we show that the effects are stronger for firms with higher initial productivity and firms located in countries considered digitally leading. Our results from the European high-tech sector suggest that the digital transformation in Europe is slow paced and scaled-up in only a fraction of the firms.
    JEL: O49 C81 O33 D20 O47
    Date: 2023–02–14
  6. By: Svilena Mihaylova (University of Economics Ð Varna)
    Abstract: Given the important role of foreign direct investment in Central and Eastern Europe, the paper explores the performance of foreign affiliates versus domestic firms in the information and communication services sector in eleven countries in the region. Based on Eurostat data for the period 2010-2020, the paper conducts descriptive and comparative analysis of foreign-owned and domestic firms in terms of size, productivity and profitability, as well as their dynamics over time. The results reveal that, on average, foreign-owned firms in the sector tend to be bigger and perform better than their local counterparts, but in the same time there are significant variations across countries.
    Keywords: Firm performance; Foreign direct investment; Multinational enterprises
    JEL: L25 F21 F23
    Date: 2023–03
  7. By: Thomas Standfuss; Georg Hirte; Michael Schultz; Hartmut Fricke
    Abstract: We systematically study cornerstones that must be solved to define an air traffic control benchmarking system based on a Data Envelopment Analysis. Primarily, we examine the appropriate decision-making units, what to consider and what to avoid when choosing inputs and outputs in the case that several countries are included, and how we can identify and deal with outliers, like the Maastricht Service Provider. We argue that Air Navigation Service Providers would be a good choice of decision units within the European context. Based on that, we discuss candidates for DEA inputs and outputs and emphasize that monetary values should be excluded. We, further suggest to use super-efficiency DEA for eliminating outliers. In this context, we compare different DEA approaches and find that standard DEA is performing well.
    Date: 2023–02
  8. By: Santos, João Vasco; Martins, Filipa Santos; Pestana, Joana; Souza, Júlio; Freitas, Alberto; Cylus, Jonathan
    Abstract: Introduction: Healthcare expenditure, a common input used in health systems efficiency analyses is affected by population age structure. However, while age structure is usually considered to adjust health system outputs, health expenditure and other inputs are seldom adjusted. We propose methods for adjusting Health Expenditure per Capita (HEpC) for population age structure on health system efficiency analyses and assess the goodness-of-fit, correlation, reliability and disagreement of different approaches. Methods: We performed a worldwide (188 countries) cross-sectional study of efficiency in 2015, using a stochastic frontier analysis. As single outputs, healthy life expectancy (HALE) at birth and at 65 years-old were considered in different models. We developed five models using as inputs: (1) HEpC (unadjusted); (2) age-adjusted HEpC; (3) HEpC and the proportion of 0–14, 15–64 and 65 + years-old; (4) HEpC and 5-year age-groups; and (5) HEpC ageing index. Akaike and Bayesian information criteria, Spearman’s rank correlation, intraclass correlation coefficient and information-based measure of disagreement were computed. Results: Models 1 and 2 showed the highest correlation (0.981 and 0.986 for HALE at birth and HALE at 65 years-old, respectively) and reliability (0.986 and 0.988) and the lowest disagreement (0.011 and 0.014). Model 2, with age-adjusted HEpC, presented the lowest information criteria values. Conclusions: Despite different models showing good correlation and reliability and low disagreement, there was important variability when age structure is considered that cannot be disregarded. The age-adjusted HE model provided the best goodness-of-fit and was the closest option to the current standard.
    Keywords: age adjustment; efficiency; frontier models; health system; uropean Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie Grant Agreement No.721402
    JEL: J1
    Date: 2023–02–13
  9. By: Pavitra Paul (CSH - Centre de sciences humaines de New Delhi - MEAE - Ministère de l'Europe et des Affaires étrangères - CNRS - Centre National de la Recherche Scientifique, Yerevan State Medical University after Mkhitar Heratsi); Ulrich Nguemdjo (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Armel Ngami (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Natalia Kovtun (Taras Shevchenko National University of Kyiv); Bruno Ventelou (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Efficiency within the health system is well recognised as key for achieving Universal Health Coverage (UHC). However, achieving equity and efficiency simultaneously is often seen as a conflicting effort. Using 12 years of data (2003–2014) from the selection of a number of low- and lower middle-income countries (Afghanistan, Bangladesh, Burkina Faso, Ghana, Indonesia, Mongolia, Mozambique, Tajikistan, Togo, Uzbekistan and Yemen Republic), we compute an index of Universal health coverage (UHC), measure the health system's performance (HSp) and, finally, investigate the cross-dynamics of the resulting HSp and the UHC previously obtained. We find that, with the few exceptions over the statistical sample, the causality between performances of the national health system and the universal health coverage is typically bidirectional. From an empirical standpoint, our findings challenge the idea from economic orthodoxy that efficiency must precede equity in healthcare services. Rather, our findings support the view of simultaneous efforts to improve expansion of the coverage and efficiency of the health system, directing attention towards the importance of organisation of the health system in the country context.
    Date: 2022–12
  10. By: Thomas Standfuss; Georg Hirte; Frank Fichert; Hartmut Fricke
    Abstract: Air traffic control is considered to be a bottleneck in European air traffic management. As a result, the performance of the air navigation service providers is critically examined and also used for benchmarking. Using quantitative methods, we investigate which endogenous and exogenous factors affect the performance of air traffic control units on different levels. The methodological discussion is complemented by an empirical analysis. Results may be used to derive recommendations for operators, airspace users, and policymakers. We find that efficiency depends significantly on traffic patterns and the decisions of airspace users, but changes in the airspace structure could also make a significant contribution to performance improvements.
    Date: 2023–02
  11. By: Di Foggia, Giacomo; Beccarello, Massimo
    Abstract: The paper compares the efficiency of alternative municipal solid waste management business models: a single provider against multiple providers. The drivers of municipal solid waste management costs are analysed to test the impact of the scale and scope of municipal solid waste management services on the average cost. While the business-as-usual scenario foresees a single provider, the alternative scenario foresees multiple providers. Based on the empirical data on municipal waste management costs, on average, the size and the average cost of the service are inversely related. This trend is supported using subsets defined by the quantity of waste managed. Multiple factors aid in explaining this result, and among others, due to scale and scope, factors such as transition costs increase with the number of players running different services. The provision of public services of economic interest should favour the participation of more companies wherever possible to the extent that social surplus is produced. However, pursuing this principle to the detriment of efficient service delivery is not ideal. This paper demonstrated that a single-provider waste management business model is efficient under specific conditions, as in this article. This paper presents an original research methodology for comparatively analysing waste management service efficiency in urban areas and provides adequate evidence using alternative measures of costs according to the phase of the waste management chain, the scale, and ultimately the scope of municipal solid waste management services.
    Date: 2023–02–27

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