nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2023‒08‒14
fifteen papers chosen by

  1. Bottlenecks: Sectoral Imbalances and the US Productivity Slowdown By Daron Acemoglu; David Autor; Christina Patterson
  2. Food Companies’ Productivity Dynamics: Exploring the Role of Intangible Assets By Nakatani, Ryota
  3. The Rise of Pro-Productivity Institutions: A Review of Analysis and Policy Recommendations By Dirk Pilat
  4. Nobody’s gonna slow me down? The effects of a transportation cost shock on firm performance and behavior By Branco, Catarina; Dohse, Dirk C.; Pereira dos Santos, João; Tavares, José
  5. The fallacy in productivity decomposition By Bruhn, Simon; Grebel, Thomas; Nesta, Lionel
  6. Cross-Platforms Merger Effects By Paudel, Ujjwol
  7. Aging and regional productivity growth in Germany By Bode, Eckhardt; Dohse, Dirk; Stolzenburg, Ulrich
  8. Supporting productivity with a ‘remote-first’ approach By Blavo, Yolanda; Lordan, Grace; Virhia, Jasmine
  9. Post-growth and the demand-pull hypothesis of innovation: Biting the hand that feeds you? By Jasny, Johannes; Schubert, Torben
  10. Servicification of Japanese Manufacturing Firms and Its Impact on Corporate Performance in the Export Market By MATSUURA Toshiyuki
  11. Efficiency, perceived prices, and household water demand: A stochastic frontier analysis for the Spanish city of Gijón By Roberto Balado-Naves; Marian Garcia-Valiñas; David Roibas
  12. Technology Diffusion across Regions By Sebbesen, Anja
  14. The fall and rebound of average establishment size in West Germany By Kovalenko, Tim; Sauerbier, Timo; Schröpf, Benedikt
  15. How institutions shape the economic returns of public investment in European regions By Inmaculada C. Alvarez; Inmaculada C. Alvarez; Luis Orea; Andrés Rodríguez-Pose

  1. By: Daron Acemoglu; David Autor; Christina Patterson
    Abstract: Despite the rapid pace of innovation in information and communications technologies (ICT) and electronics, aggregate US productivity growth has been disappointing since the 1970s. We propose and empirically explore the hypothesis that slow growth stems in part from an unbalanced sectoral distribution of innovation over the last several decades. Because an industry's success in innovation depends on complementary innovations among its input suppliers, rapid productivity growth that is concentrated in a subset of sectors may create bottlenecks and consequently fail to translate into commensurate aggregate productivity gains. Using data on input-output linkages, citation linkages, industry productivity growth and patenting, we find evidence consistent with this hypothesis: the variance of suppliers' Total Factor Productivity growth or innovation adversely affects an industry's own TFP growth and innovation. Our estimates suggest that a substantial share of the productivity slowdown in the United States (and several other industrialized economies) can be accounted for by a sizable increase in cross-industry variance of TFP growth and innovation. For example, if TFP growth variance had remained at the 1977-1987 level, US manufacturing productivity would have grown twice as rapidly in 1997-2007 as it did—yielding a counterfactual growth rate that would have been close to that of 1977-1987 and 1987-1997.
    JEL: O30 O47
    Date: 2023–07
  2. By: Nakatani, Ryota
    Abstract: Food insecurity has risen amid economic recovery from the COVID-19 pandemic. Food companies’ productivity dynamics can be driven by intangible assets, financing, economies of scale, lifecycle, and technological convergence. We confront this by studying productivity drivers for detailed food manufacturing industries using cross-country firm-level panel data. The results show that intangible assets nonlinearly and heterogeneously affect productivity growth, and countries with fewer product market regulations demonstrate higher productivity benefits from asset intangibility. Intangible assets do not play a major role for start-up companies, while technological convergence drives productivity growth as they learn new technology in the food markets. Regarding the industrial differences, the bakery sector benefits the most from asset intangibility because of its brand images. Financing is particularly important for the meat/fish and dairy sectors, where capital equipment is necessary, and leverage effects are larger for countries with more access to financial institutions. Economies of scale are a vital productivity enhancer in the grain and starch sector for lowering fixed costs. Industrial policies to (i) raise the quality of intangible assets, (ii) promote financial access, and (iii) utilize scale economies are critical for improving the productivity of food manufacturers.
    Keywords: productivity growth; food manufacturing; asset intangibility; start-up; technological convergence; financing; scale economies; agri-food; product market regulations: financial development; grain and starch sector; meat and fish sector; dairy sector; fruit and vegetable sector; bakery sector
    JEL: D24 G32 L66 O34
    Date: 2023–07–08
  3. By: Dirk Pilat (The University of Manchester, The Productivity Insitute and Valencia Institute of Economic Research)
    Keywords: Productivity, Productivity Commissions, Country Studies, Economic Growth, Productivity Policies
    Date: 2023–03
  4. By: Branco, Catarina; Dohse, Dirk C.; Pereira dos Santos, João; Tavares, José
    Abstract: We study the firm-level responses to a substantial increase in transportation costs in the wake of a quasi-experiment that introduced tolls in a subset of Portuguese highways. Exploiting a unique dataset encompassing the universe of Portuguese private firms, we find that the introduction of tolls caused a substantial decrease in turnover (−10.2%) and productivity (−4.3%) in treated firms vis-à-vis firms in the comparison group. In response to the tolls, firms substantially cut employment-related expenses and purchases of other inputs. Labor costs were reduced by both employment cuts and a decrease in average wages. While firms did not increase inventory, there is some evidence for increased firm exit, in particular by firms in tradables sectors.
    Keywords: Road tolls, Infrastructure, Firm performance, Firm behavior, Location, Portugal
    JEL: R48 L25 R12
    Date: 2023
  5. By: Bruhn, Simon; Grebel, Thomas; Nesta, Lionel
    Abstract: This paper argues that the typical practice of performing growth decompositions based on log-transformed productivity values induces fallacious conclusions: using logs may lead to an inaccurate aggregate growth rate, an inaccurate description of the microsources of aggregate growth, or both. We identify the mathematical sources of this log-induced fallacy in decomposition and analytically demonstrate the questionable reliability of log results. Using firm-level data from the French manufacturing sector during the 2009-2018 period, we empirically show that the magnitude of the log-induced distortions is substantial. Depending on the definition of accurate log measures, we find that around 60-80% of four-digit industry results are prone to mismeasurement. We further find significant correlations of this mismeasurement with commonly deployed industry characteristics, indicating, among other things, that less competitive industries are more prone to log distortions. Evidently, these correlations also a affect the validity of studies that investigate the role of industry characteristics in productivity growth.
    Keywords: productivity decomposition, growth, log approximation, geometric mean, arithmetic mean
    Date: 2023
  6. By: Paudel, Ujjwol
    Keywords: Agribusiness, Productivity Analysis, Research Methods/Statistical Methods
    Date: 2023
  7. By: Bode, Eckhardt; Dohse, Dirk; Stolzenburg, Ulrich
    Abstract: We investigate the effects of aging on regional productivity growth, the mechanisms and the strength of which are not well-understood. We focus on two different manifestations of population aging—workforce aging and an increasing share of retirees—and investigate channels through which aging may impact on regional productivity growth for a panel of German counties 2000–2019. We find that workforce aging is more negatively associated with productivity growth in urban than in nonurban regions. A likely reason is that aging is detrimental to innovative and knowledge-intensive activities, which are heavily concentrated in cities. We also find a negative association between the share of the retired population and productivity growth in regions with a small household services sector. A likely reason is that older people’s disproportionate demand for local household services (including health care, recreation) requires a re-allocation of resources from more productive manufacturing or business services to less productive household services. Regions specialized more in highly productive industries have more to lose in this process.
    Keywords: Workforce aging, Population aging, Productivity growth, Regional analysis, Germany
    JEL: E24 J11 J24 J26 R11
    Date: 2023
  8. By: Blavo, Yolanda; Lordan, Grace; Virhia, Jasmine
    JEL: J50
    Date: 2023–05–08
  9. By: Jasny, Johannes; Schubert, Torben
    Abstract: The post-growth discourse emphasizes the role need to limit economic growth as a primary means to stop continuous environmental degradation associated with production induced overexploitation of natural resources. A criticism of the post-growth discourse is, however, that innovation is known to be demand-driven implying that limiting growth may then undermine incentives to innovate. This may reduce the speed with which new environmentally friendly technologies are developed. Empirical analysis of this claim however do not exist. Relying on data from the European Manufacturing Survey 2018 for Germany, we match macroeconomic sector-growth statistics from the German Statistical Office and analyse how firm-level and sector level growth drive firms' innovation activities with a specific focus to environmental innovations. We find that while firm-level growth is strongly associated with all kinds of innovation activities, sector-level growth is not. Our results suggest that limiting overall economic growth may not undermine incentives to innovate as long as growth is still feasible on the level of the firm.
    Keywords: Economic growth, Innovation, Post-growth, Demand pull hypothesis, Green growth
    Date: 2023
  10. By: MATSUURA Toshiyuki
    Abstract: This study revisit the impact of the servicification of Japanese manufacturing firms in terms of firm-level performance in export markets, using Japanese firm-level panel data set from 2009 to 2019. We constructed two measures of firm-level servificiation: in-house service production and bought-in service input, which is service input procured from external providers. We then examine its impact on corporate performance in export markets, measured by the Global Value Chain participation dummy, namely, the two-way trader dummy and the export intensity. Unlike previous studies, we examine various measures of service outsourcing and estimate the Correlated Random effects model, which enables us to control for unobserved individual fixed effects. We find that bought-in service input, especially service outsourcing, significantly impacts GVC participation and export intensity, and that this effect is more pronounced for high-tech industries.
    Date: 2023–06
  11. By: Roberto Balado-Naves (Oviedo Efficiency Group - University of Oviedo); Marian Garcia-Valiñas (Oviedo Efficiency Group - University of Oviedo); David Roibas (Oviedo Efficiency Group - University of Oviedo)
    Abstract: In the current context of pressure on available water resources, sustainable patterns of water consumption emerge as an important matter of concern. In this sense, efficient consumption is usually understood as the optimal usage of the available resources. Thus, we study households' efficiency levels by considering a stochastic frontier analysis of the demand for water services using a representative sample of a northern city in Spain. Besides, efficient consumption habits require a costly acquisition of accurate information, whether in terms of prices or the effective demand of a given resource. Thus, we also study the impact of several determinants on the efficiency levels of water demand, as in Hung et al. (2017). These range from the deviations between perceived and real prices to social characteristics such as the average age of households or their degree of environmental awareness. We find strong evidence in favor of higher efficiency levels among more informed households which also commit themselves to the environment. The relevance of this research to the current state of the empirical literature is twofold: first, it expands the number of scarce analyses on stochastic frontiers of residential water demand; second, it contributes to a better understanding of the importance of accurate information on optimal decisions of consumers. Moreover, we use a novel and exclusive database for a representative sample of households in the city of Gijón (Spain) between 2017 and 2021, where we combine real data on water prices and consumption with consumer perceptions obtained from a survey.
    Date: 2023–01–01
  12. By: Sebbesen, Anja
    Abstract: Until recently, the geographical coverage of empirical studies on regional technology diffusion was usually rather limited or biased towards the industrialized world. This paper extends the sample of analysis and investigates regional TFP growth and the factors determining productivity spillovers for an extensive amount of regions. Nonlinearities in the effects of the explanatory variables as well as spatial spillovers are considered in the estimation model. The findings confirm a robust direct impact of technological catch-up on regional TFP growth. Catch-up speeds increase with higher levels of human capital and in countries with larger inflows of FDI. Furthermore, positive spatial spillovers of technology levels are observed.
    Keywords: Regional TFP growth; transmission channels; spatial spillovers; human capital; spatial switching regression
    Date: 2023–07
  13. By: Sari, Ajeng Rossantika; Sulistiyana, Fitri; Pandin, Maria Yovita R
    Abstract: This research has the purpose of analyzing the application of green accounting which has the ability as environmental costs and environmental performance with the level of profit. The research object studied at this time is PT Unilever Indonesia Tbk which uses a descriptive qualitative method where the data collection source is the company's annual report distributed by the Indonesia Stock Exchange (IDX). The environmental cost variable has no influence on the level of profit, the environmental performance variable has no influence on the level of profit. This study aims to improve Green Accounting in the application of company profitability.
    Date: 2023–06–16
  14. By: Kovalenko, Tim; Sauerbier, Timo; Schröpf, Benedikt
    Abstract: In West Germany, the average size of establishments declined during the 1990s and started to increase again in the late 2000s, while the employer size wage premium followed the opposite trajectory. In this paper, we show that these two developments are interrelated. More precisely, our results suggest that variations in the employer size wage premiums induced establishments to vary their employment level, consistent with monopsony power on the labor market. Moreover, our regional analyses show that average establishment size correlates positively with GDP per capita. We rationalize these findings with a heterogeneous firms model with monopsonistic competition in the labor market, stemming from the household's love-of-variety preferences for employers. Both empirics and theory reveal that higher size wage premiums decrease average establishment size by downsizing incumbent establishments and triggering the entry of small establishments, thus also negatively affecting aggregate productivity.
    Keywords: Establishment Size, Size Wage Premium, Productivity, Labor Market Power, Germany
    JEL: E24 J31 J42 L25
    Date: 2023
  15. By: Inmaculada C. Alvarez; Inmaculada C. Alvarez; Luis Orea; Andrés Rodríguez-Pose
    Abstract: In this paper, we examine the impact of institutional quality on the returns of key drivers of economic growth in 230 European Union (EU) NUTS-2 regions from 2009 to 2017. To estimate region-specific elasticities, we employ a latent class modelling approach, considering the quality of government and the degree of authority in each region as mediators. Our findings reveal significant variation in the returns to education, physical capital investment, and innovation across regions. Moreover, we observe that changes in government quality and regional authority influence the ability of EU regions to leverage different types of investment effectively. These results emphasize the importance of considering the government quality in regions where investments are made in order to maximize the returns on European Cohesion investment
    Date: 2023

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