nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2023‒09‒11
nineteen papers chosen by

  1. Digitalization: Productivity By Jeffrey Mollins; Temel Taskin
  2. Recent Trends in Firm-Level Total Factor Productivity in the United Kingdom: New Measures, New Puzzles By Diane Coyle; John McHale; Ioannis Bournakis; Jen-Chung Mei
  3. Robust productivity growth and efficiency measurement with undesirable outputs: evidence from the oil industry By Hatami-Marbini, A.; Arabmaldar, A.; Otu Asu, J.
  4. Accounting for cross-country output differences: A sectoral CES perspective By Jan Trenczek; Konstantin M. Wacker
  5. The Impact of Digital Transformation on Productivity and Resource Reallocation within Firms (Japanese) By FUKAO Kyoji; INUI Tomohiko; KIM Young Gak; KWON Hyeog Ug; IKEUCHI Kenta
  6. Eficiencia y solidez financiera de las Instituciones prestadoras de Servicio de Salud (IPS) en Colombia By Carolina Crispin-Fory; Ligia Alba Melo-Becerra; Diego Alexander Restrepo-Tobón; Diego Vásquez-Escobar
  7. Air Pollution and Agricultural Productivity in a Developing Country By Merfeld, Joshua D.
  8. The Effect of Resource Reallocation within Business Groups on Macroeconomic Total Factor Productivity (Japanese) By FUKAO Kyoji; KIM YoungGak
  9. Information frictions and the two margins of trade: Evidence from Slovenian manufacturing By Zaurino, Elena; Polanec, Sašo
  10. About governance, production, and territorial dimensions of farm competitiveness – the case of Bulgaria By Bachev, Hrabrin
  11. Tax Efficiency and Circular Economy in Jordan: Evaluating the role of tax efficiency in promoting circular economy practices within Jordanian businesses, considering both financial and environmental implications By Abbas, Asad
  13. Business groups, institutions, and firm performance By Cainelli, Giulio; Ganau, Roberto; Giunta, Anna
  14. Big data and firm marketing performance: Findings from knowledge-based view By Shivam Gupta; Théo Justy; Shampy Kamboj; Ajay Kumar; Eivind Kristoffersen
  15. Performance of Renewable Energy Policies - Evidence from Germany's Transition to Auctions By Geßner, Daniel
  16. The Responses of an Organization for the Increase in Wage Rates: Profit Maximization Cases By Mohajan, Devajit; Mohajan, Haradhan
  17. CUSTOMER FOCUS AND EFFICIENCY OF PUBLIC SERVICE PROVIDERS By Maleva, Tatiana (Малева, Татьяна); Rogozin, Dmitry (Рогозин, Дмитрий)
  18. Financial sector efficiency as a factor of maximizing long-term economic growth By Danilov Yury (Данилов, Юрий); Pivovarov, Daniil (Пивоваров, Даниил); Davydov, Igor (Давыдов, Игорь)
  19. Financial and Social performance of Microfinance Institutions By Hugues Keje

  1. By: Jeffrey Mollins; Temel Taskin
    Abstract: We examine the relationship between digitalization and productivity, the factors that influence this relationship, and how digitalization’s effect on productivity could change firm behaviour.
    Keywords: Digitalization; Productivity
    JEL: E2 L11 O47 O51
    Date: 2023–08
  2. By: Diane Coyle (Bennett Institute of Public Policy, University of Cambridge); John McHale (School of Business and Economics, University of Galway, Ireland); Ioannis Bournakis (SKEMA Business School and Université CÈ te d’ Azur, France); Jen-Chung Mei (Bennett Institute of Public Policy, University of Cambridge)
    Keywords: Productivity, Quality, Manufacturing, ICT
    JEL: D22 D24 D42 D43 E24 O47
    Date: 2023–08
  3. By: Hatami-Marbini, A.; Arabmaldar, A.; Otu Asu, J.
    Date: 2022–05–23
  4. By: Jan Trenczek (University of Mainz); Konstantin M. Wacker (University of Groningen)
    Abstract: Conventional development accounting attributes the enormous variation in output per worker across countries to differences in production factors and productivity. Our paper contributes to this literature along three important lines. First, we tackle the simplifying assumption of an aggregate Cobb-Douglas production function by estimating more flexible constant elasticity of substitution (CES) production functions in a tradable market sector and five subsectors across 38 countries. Our results suggest that physical and human capital are gross complements in production in all sectors, indicating that production factors play a larger role in explaining cross-country output differences than previously thought. Second, we find that differences in output per worker largely stem from the efficiency with which countries employ human capital. Third, we highlight the importance of sector-level analyses by showing that productivity differences play a smaller role in construction, distribution services, and financial and business services than in manufacturing and personal services.
    Keywords: Development accounting, Sector level, Production function, Elasticity of substitution, Total factor productivity
    JEL: F
    Date: 2023
  5. By: FUKAO Kyoji; INUI Tomohiko; KIM Young Gak; KWON Hyeog Ug; IKEUCHI Kenta
    Abstract: Prior studies have pointed out that the Japanese economy has lagged behind in IT and has not fully enjoyed the productivity benefits of IT investments, which has led to a prolonged slump in productivity growth to some extent. The spread of COVID-19 is forcing the Japanese economy to undergo digital transformation (DX), but there has been insufficient prior research in Japan on the impact of DX on corporate performance. This study analyzed the relationship between DX and corporate performance using firm-level data. The main findings are as follows: (1) IT investment is positively correlated with firm productivity, with the main contribution coming from software; (2) the establishment of a concurrent Chief Information Officer (CIO) is positively correlated with firm productivity, but the complementary relationship between CIO and IT investment is not confirmed; (3) there is no direct relationship between the introduction of new devices such as smartphones and tablets into the workplace and firm productivity; (4) there is no significant relationship between the use of big data within a company and productivity improvement; and (5) sharing data with supplier companies is positively related to corporate productivity, while sharing with customers is negatively correlated with firm productivity; and (6) IT investment by the Japanese headquarters has a weak positive correlation with the profit margin of overseas subsidiaries. For this study, we connected and analyzed firm-level data from the "ICT Workplace Survey", the "Basic Survey of Japanese Business Structure and Activities" and the "Basic Survey on Overseas Business Activities" conducted by the Ministry of Economy, Trade and Industry (METI), the "Survey on Big Data Utilization and Innovation in Manufacturing" by RIETI and firm-level data provided by Tokyo Shoko Research (TSR)".
    Date: 2023–08
  6. By: Carolina Crispin-Fory; Ligia Alba Melo-Becerra; Diego Alexander Restrepo-Tobón; Diego Vásquez-Escobar
    Abstract: Este estudio examina la eficiencia de las Instituciones Prestadoras de Servicio de Salud (IPS) en Colombia, entre 2017 y 2021. Para la estimación se aplica un enfoque de frontera estocástica, empleando una función de distancia orientada a los insumos, con el fin de dar cuenta del carácter multi producto de las IPS. Después de controlar por el tamaño de las entidades, la participación en atención de enfermedades de alto costo y la capacidad administrativa, se encuentra que la eficiencia técnica promedio encontrada es del 75% y no hay ganancias en eficiencia durante el periodo analizado. Además, utilizando la metodología CAMEL se realiza un análisis de la solidez financiera de las IPS y se evalúala relación con los resultados de eficiencia de las entidades. Los resultados encuentran una asociación positiva entre la eficiencia de las IPS, y los indicadores de rentabilidad y liquidez, sugiriendo que las instituciones con una mayor estabilidad financiera y una mejor gestión de recursos exhiben niveles más altos de eficiencia.******ABSTRACT: This study evaluates the technical efficiency of the Health Service Provider Institutions (IPS) in Colombia, between 2017 and 2021. We use a stochastic frontier approach to estimate an input-oriented distance function to account for the multi-product nature of the IPS. After controlling for entity size, participation in high-cost disease care, and administrative capacity, the findings reveal an average technical efficiency of 75% with no efficiency gains during the analyzed period. Additionally, using the CAMEL methodology, an analysis of IPS financial soundness is conducted, evaluating its relationship with efficiency outcomes of the entities. The results identify a positive association between IPS efficiency and profitability and liquidity indicators, suggesting that institutions with greater financial stability and better resource management exhibit higher levels of efficiency.
    Keywords: Eficiencia técnica, Funciones de distancia orientada a insumos, Frontera estocástica, IPS, Colombia, Technical efficiency, Input-oriented distance functions, Stochastic frontier
    JEL: D24 I12 L25
    Date: 2023–08
  7. By: Merfeld, Joshua D. (KDI School of Public Policy and Management)
    Abstract: I document negative externalities of air pollution in the Indian agricultural sector. Using variation in pollution induced by changes in wind across years, I show that higher levels of pollution lead to decreased agricultural productivity, with large changes in productivity being common. The negative effects of pollution are larger in areas growing more labor-intensive crops, indicating that the pollution works at least partly through direct effects on labor productivity. Finally, combining wind direction with the rollout of coal plants, results indicate that pollution from coal plants has a larger effect on agricultural productivity than other types of pollution. Given that the agricultural sector is a refuge for the poor in many developing countries, these results suggest that the negative externalities of pollution may hit the poorest particularly hard.
    Keywords: pollution, productivity, agriculture, labor, India
    JEL: H40 I15 J22 O13 Q52 Q53
    Date: 2023–07
  8. By: FUKAO Kyoji; KIM YoungGak
    Abstract: Under Japanese employment practices, characterized by lifetime employment and seniority-based wages, the underdeveloped labor market for mid-career hiring and the difficulty of firing workers, especially regular employees in large firms, likely hinder the redistribution of labor across firms or between corporate groups. With employment essentially guaranteed for regular workers at large firms and labor mobility low, the intra-firm labor market plays a crucial role in Japan, and there is a strong possibility that human resource portfolios are reallocated, and that capital is lent or borrowed within corporate groups. Some of the inter-firm reallocation effects need to be viewed as results of business group decision-making rather than as a market selection mechanism. In this paper, by adding business-group factors to the approach of analyzing productivity dynamics suggested by Foster, Haltiwanger, and Krizan (2001), we decompose total factor productivity (TFP) growth into the within effects and the resource reallocation effects of independent firms and business group firms using microdata of the Basic Survey of Japanese Business Structure and Activities, conducted by the Ministry of Economy, Trade and Industry (METI), and measure the relative importance of these effects. We find that in the 2000-2010 period, business-group firms made the largest contribution to TFP growth. Specifically, reflecting large firms’ internationalization and relocation of production overseas, the revision of Japan’s Commercial Code, and deregulation of the worker dispatch business during this period, the within effects of business group firms, intra-group reallocation effects, and resource allocation effects due to changes in the market share of business groups through acquisitions accounted for the majority of the increase in TFP. On the other hand, in the 2010-2018 period, independent firms made the largest contribution to TFP growth, but overall growth was slower than in the 2000-2010 period. The main reasons for the slowdown were a substantial decrease in the resource reallocation effect of changes in the industry share of business groups whose ownership structure had changed, as well as a substantial decrease in the within effects of group firms and the reallocation effect within business groups. Selection through market competition is functioning among single firms, including small and medium-sized firms with low employment security. In contrast, reallocation between business groups and between independent firms and business groups has been very sluggish. In corporate groups, labor can be reallocated while guaranteeing employment through mergers and acquisitions.
    Date: 2023–07
  9. By: Zaurino, Elena (European Commission); Polanec, Sašo (University of Ljubljana)
    Abstract: We empirically investigate whether firms lower information frictions in foreign sourcing through prior exporting. Using a panel of Slovenian manufacturing firms in the period 1996-2011, we estimate the probability of import entry in a new market when the firm is already exporting to the same country and we find a positive and significant relation. To control for the endogeneity of the export decision, we implement an instrumental variable approach exploiting the notion of sequential exporting. Moreover, we rule out productivity growth as being the only predictor of entry in a foreign market through several falsification tests. These findings suggest information frictions play an important role for firms trading in international markets.
    Keywords: Sourcing, Import entry, Information Frictions, Sunk costs
    JEL: F14 L20 D22 D83
    Date: 2023–06
  10. By: Bachev, Hrabrin
    Abstract: The issues related to proper assessments of the competitiveness of farming enterprises in general and of different type and locations has been among the most topical for academicians, agro-business managers, interest groups, administrators, politicians, international organizations, and the public at large. Farm competitiveness has been usually assessed through traditional indicators of technical and accountancy efficiency, the productivity of factors of production, the profitability of activity, the farms’ market position, shares, etc. A systematic approach for defining competitiveness and formulating its pillars, principles, criteria, and indicators has been rarely implemented, and the critical governance aspects have been largely ignored. This paper incorporates a holistic multi-pillar framework and assesses the levels of and correlations between the competitiveness of Bulgarian farms of different juridical types, economic sizes, product specialization, and ecological and geographical locations. For assessing the level of competitiveness of farms, a system of 4 pillars (Economic efficiency, Financial endowment, Adaptability, and Sustainability), 4 criteria for each Pillar, and 17 particular and 5 integral indicators are used. The study has found out that the level of competitiveness of agricultural holdings in the country is at a good level, but there is significant differentiation in the level and factors of competitiveness of holdings with different juridical types, sizes, product specialization, ecological and geographical location. The low adaptive potential and economic efficiency to the greatest extent contribute to lowering the competitiveness of Bulgarian agricultural producers. A large share of farming enterprises has a low level of competitiveness, and if measures are not taken in due time to improve governance and public support, a large part of Bulgarian farms will cease to exist in the near future. The suggested approach for assessing the competitiveness of farms should be improved and applied more widely and periodically. The precision and representativeness of the information used should also be increased by increasing the number of farms surveyed, which requires close cooperation with other interested parties, and improving the system for collecting agro-statistical information in the country and the EU.
    Keywords: competitiveness, production, financial, and governance pillars, farms
    JEL: Q11 Q12 Q13 Q14 Q18
    Date: 2023
  11. By: Abbas, Asad
    Abstract: Tax Efficiency and Circular Economy in Jordan: Evaluating the role of tax efficiency in promoting circular economy practices within Jordanian businesses, considering both financial and environmental implications
    Date: 2023–08–10
  12. By: Zhemkova, Alexandra (Жемкова, Александра) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper assesses the impact of the expected market size on the stimulation of the technological development of Russian durable goods manufacturing companies. The work is structured as follows: the first chapter examines theoretical foundations of analyzing the impact of demand on the productivity and innovation activity of the companies, and examines the key sources of productivity growth and technological progress. The second chapter presents an analysis of indicators of the market size for durable goods in Russia, as well as data for Russian durable goods producers. The third chapter presents the empirical strategy and the results of the empirical assessment of the influence of market size on productivity and innovation, including for certain sectors of durable goods production. The fourth chapter analyzes the main measures of economic policy in the field of increasing productivity through the market channel. The main conclusions of the study and recommendations are presented at the end of the work.
    Keywords: demand, market size, firm, productivity, labor productivity, TFP, innovation, technological progress
    Date: 2021–11–12
  13. By: Cainelli, Giulio; Ganau, Roberto; Giunta, Anna
    Abstract: The aim of this paper is twofold. First, we analyze whether firms affiliated to national and international business groups outperform independent firms. Second, we investigate whether any potential performance premium associated with national and international business group membership depends on the quality of sub-national, regional institutions. Using data on Italian and Spanish manufacturing firms, we find a short-run growth premium for international business group members - while not for national business group members - with respect to independent firms. We also find that the growth premium associated with international business group membership is detected in low-quality regional institutional environments only.
    JEL: D02 R12
    Date: 2022–01–31
  14. By: Shivam Gupta (NEOMA - Neoma Business School); Théo Justy (MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier, Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Shampy Kamboj (National Institute of Technology [Hamirpur]); Ajay Kumar (EM - emlyon business school); Eivind Kristoffersen (NTNU - Norwegian University of Science and Technology [Trondheim] - NTNU - Norwegian University of Science and Technology)
    Date: 2021–10
  15. By: Geßner, Daniel
    Abstract: Government support for green technologies and renewable energy in particular has become an integral cornerstone of economic policy for most industrialized economies. Due to competitive price determination and supposedly higher efficiency, auctions have in recent years widely succeeded feed-in-tariffs as the primary support instrument (del Rio & Linares, 2014; REN21, 2021). However, literature still struggles to produce causal evidence to validate mostly descriptive findings for efficiency gains. Yet, this evidence is needed as a foundation to provide robust recommendations to policy makers (Grashof et al., 2020). By utilizing a difference-in-differences approach, this paper provides such evidence for a German photovoltaic (PV) auctioning program which came into effect in 2015. Results for this natural experiment confirm that cost-effectiveness improved significantly while previous literature shows that capacity expansion remained high. Results additionally show that falling prices for PV panels were the primary driver of cost reductions and wages also exert high influence on support price. Input cost development therefore indeed strongly influences support level which was the aim with introducing competitive auctions. Interest rate development cannot be linked to support level development, most probably due to the low interest environment in considered period.
    Keywords: auctions, feed-in-tariffs, photovoltaic (PV), renewable energy policy, policy valuation, difference-in-differences
    JEL: Q48 Q55 Q58
    Date: 2023
  16. By: Mohajan, Devajit; Mohajan, Haradhan
    Abstract: Every organization expects to achieve maximum profit for its survival economic environment. To develop profit maximization strategy an organization must be sincere in economic sensitivity analysis. In this study sensitivity analysis is inspected to predict about the economic situation for the efficient production of the organization. Here scientific based production policy is indicated subject to a budget constraint, using Lagrange multiplier technique.
    Keywords: Profit maximization, Lagrange multiplier, wage, sensitivity analysis
    JEL: C3 C54 C61 C65 C67 C81 D6 I3 J3 J31
    Date: 2023–06–09
  17. By: Maleva, Tatiana (Малева, Татьяна) (The Russian Presidential Academy of National Economy and Public Administration); Rogozin, Dmitry (Рогозин, Дмитрий) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Implementing the goals related to the modernization of the sphere of public services requires revising the reform stages that have been completed and assessing its current results. This study proposes an integrated approach to the development of a methodology for such an assessment, as well as a communication environment that creates an effective demand for the data obtained. The research objective is to develop and test a methodology for assessing the customer focus of government institutions. The tasks are: to formulate a problem, build a research methodology, form an array of data, assess the general perception of the public services sector by the respondents, identify the most problematic sectors of public services in the public perception, and analyze the respondents’ proposals. The research methodology is based on analytical procedures related to the collection and processing of primary and secondary data, conducting opinion polls and interpreting research results. The study is aimed at identifying the public perception of the level of customer focus of public service providers and government agencies, which determines the relevance of this work. The object of the research is the socio-economic situation of the population of Russia. The subject of the research is the satisfaction of the public with the quality and procedure for the provision of public services. The survey was conducted on March 23- 27, 2021 on a non-random river sample. In total, 2110 people were interviewed. The sample is not representative and does not represent the population of Russia; however, it allows us to formulate significant hypotheses and highlight the characteristic features of the perception of the quality of public services by various social groups. The results of the study show that the public has a generally positive attitude towards public services: the maximum value of the Index for assessing the quality of public services reveals the top three (migration registration services, obtaining personal vehicle documents, medicine). Nevertheless, the high assessment of the quality of medical services contradicts the data of other surveys that state the Russians’ critical attitude towards the healthcare sector. Approval of the depersonalization of the service provider in areas such as education and health deserves in-depth study.
    Keywords: Public service efficiency index, targeted survey, non-random sample, quality of services, customer focus of services, social services, public service centers, public survey
    Date: 2021–11–11
  18. By: Danilov Yury (Данилов, Юрий) (The Russian Presidential Academy of National Economy and Public Administration); Pivovarov, Daniil (Пивоваров, Даниил) (The Russian Presidential Academy of National Economy and Public Administration); Davydov, Igor (Давыдов, Игорь) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper analyzes various concepts of financial sector efficiency, and, based on this analysis, the authors established financial sector indicators that are the most appropriate for empirical research and for the establishment of key performance indicators for financial regulators. The authors develop a set of performance indicators, based on which they analyze changes in various aspects of efficiency of the Russian financial sector, including its usefulness for the investment recipients and for households, as the main suppliers of investment resources. Based on the Russian data, empirical studies of the impact of efficiency on economic growth have been conducted. Proposals for the construction of a set of key performance indicators that evaluate the performance of social and economic functions by the financial sector, its participation in the achievement of strategic national objectives and the level of financial development are formulated.
    Date: 2021–12–14
  19. By: Hugues Keje (FED - Faculté d'Economie et Développement. Université Catholique du Congo - Université catholique du Congo)
    Abstract: L'atteinte d'un impact social auprès des populations marginalisées, finalité première des institutions de microfinance, exige à ces dernières de concilier leurs performances financières et sociales afin d'assurer la pérennisation de leurs activités. Au moyen de la base des données de Mix Market, cette étude s'est attelé d'évaluer dans le temps l'efficience des IMF, partant d'un échantillon de 150 institutions reparties à travers cinq régions du monde et à l'aide de la méthode d'enveloppement des données (DEA). Il s'observe des corrélations positives entre les différentes approches selon le modèle CCR contrairement au modèle BCC qui présente d'une part, une opposition entre les approches Dépôt et Crédit par rapport à l'approche sociale et d'autre part, une faible corrélation positive entre l'approche financière et l'approche sociale. Les IMF sont très agressives dans la mobilisation de l'épargne et présentent assez des restrictions dans l'octroi des crédits. Les Imf sont plus efficientes au niveau financier que social selon les approches d'efficience technique (86, 4% contre 34, 9%) et d'échelles (91% contre 51%). L'apport du présent travail par rapport aux études antérieures sur le sujet est l'intégration des influences de la gestion de risque et de la conjoncture économique dans la mesure des scores d'efficience de ces institutions.
    Keywords: Microfinance, Performance, DEA
    Date: 2022

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