nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2023‒09‒25
seven papers chosen by

  1. Australia’s Productivity Malaise: Reflections on the ‘Debate’ By Gary Banks AO
  2. European firm concentration and aggregate productivity By Bighelli, Tommaso; Mertens, Matthias; Di Mauro, Filippo; Melitz, Marc
  3. Worker productivity during Covid-19 and adaptation to working from home By Burdett, Ashley; Etheridge, Ben; Wang, Yikai; Tang, Li
  4. From Mundane to Meaningful: AI's Influence on Work Dynamics -- evidence from ChatGPT and Stack Overflow By Quentin Gallea
  5. Economic Effects of R&D Supports By Huseyin Emre Sayici; Mehmet Fatih Ulu
  6. Fitting spatial stochastic frontier models in Stata By Manuel Llorca; Ana Rodriguez-Alvarez
  7. Capital, Productivity, and Human Welfare since 1870 By Daniel Gallardo-Albarrán

  1. By: Gary Banks AO (Professorial Fellow, Melbourne Institute and Senior Fellow, Centre for Independent Studies)
    Abstract: Shann Memorial Lecture, University of Western Australia, 16 August 2023
    Keywords: Productivity, Australia
    Date: 2023
  2. By: Bighelli, Tommaso (Halle Institute for Economic Research (IWH)); Mertens, Matthias (Halle Institute for Economic Research (IWH)); Di Mauro, Filippo (Halle Institute for Economic Research (IWH)); Melitz, Marc (Harvard University)
    Abstract: This paper derives a European Herfindahl–Hirschman concentration index from 15 micro-aggregated country datasets. In the last decade, European concentration rose due to a reallocation of economic activity toward large and concentrated industries. Over the same period, productivity gains from an increasing allocative efficiency of the European market accounted for 50% of European productivity growth while markups stayed constant. Using country-industry variation, we show that changes in concentration are positively associated with changes in productivity and allocative efficiency. This holds across most sectors and countries and supports the notion that rising concentration in Europe reflects a more efficient market environment rather than weak competition and rising market power.
    JEL: D24 F15 L11 L25 O47
    Date: 2022–12
  3. By: Burdett, Ashley; Etheridge, Ben; Wang, Yikai; Tang, Li
    Abstract: We examine reported productivity changes of workers over the course of the Covid-19 pandemic, which we validate against external metrics. On average, workers report being at least as productive as before the pandemic’s onset. However, this average masks substantial heterogeneity, which is linked to job quality, gender, the presence of children, and ease of working from home. As the pandemic progressed, those who previously performed well at home were more likely to remain there. Building on these findings, we estimate factors affecting productivity outcomes across locations controlling for endogenous selection. We find that those in ‘good’ jobs (with managerial duties and working for large firms) were advantaged specifically in the home environment. More generally we find an effect of key personality traits – agreeableness and conscientiousness – on productivity outcomes across locations.
    Date: 2023–08–16
  4. By: Quentin Gallea
    Abstract: This paper illustrates how generative AI could give opportunities for big productivity gains but also opens up questions about the impact of these new powerful technologies on the way we work and share knowledge. More specifically, we explore how ChatGPT changed a fundamental aspect of coding: problem-solving. To do so, we exploit the effect of the sudden release of ChatGPT on the 30th of November 2022 on the usage of the largest online community for coders: Stack Overflow. Using quasi-experimental methods (Difference-in-Difference), we find a significant drop in the number of questions. In addition, the questions are better documented after the release of ChatGPT. Finally, we find evidence that the remaining questions are more complex. These findings suggest not only productivity gains but also a fundamental change in the way we work where routine inquiries are solved by AI allowing humans to focus on more complex tasks.
    Date: 2023–08
  5. By: Huseyin Emre Sayici (Fisher College of Business, Ohio State University); Mehmet Fatih Ulu (College of Administrative Sciences and Economics, Koç University)
    Abstract: This study examines the economic effects of research and development (R&D) supports in the context of a program implemented in Türkiye between 2006-2019. Firms receiving the support differ positively from other firms in key economic indicators. Results indicate a 6% rise in patent registrations, 9% growth in value-added, 26% surge in total wages, 17% increase in per capita wages, 9% expansion in employment, 10% boost in productivity, 11% rise in exported product diversity, and 4% uptick in sales due to the support. Nonetheless, the effects on productivity and sales are statistically weaker than other impacts. The average impact of patents is also modest. Large-scale firms exhibit significant benefits, with a 33% rise in patent numbers and a 13% growth in sales. These firms effectively leverage support to commercialize R&D investments and innovations. Small-sized firms experience stronger productivity effects. Productivity gains grow with scale among SMEs, but large firms do not see positive productivity effects.
    Keywords: R&D supports, TEYDEB, innovation, matching.
    JEL: O31 O32 O38
    Date: 2023–09
  6. By: Manuel Llorca; Ana Rodriguez-Alvarez
    Abstract: The European Union has committed to make Europe the first climate-neutral continent by 2050. Reaching this objective implies massive changes in the economies of the region. The biggest challenge of this green transition is to make sure that it happens without sacrificing economic progress and guaranteeing justice and inclusiveness. This pledge requires that every country be capable of addressing the trade-offs between the targets while remaining committed towards the common decarbonisation goal. This paper analyses the success with which European countries are carrying out the energy transition. We propose an enhanced hyperbolic distance function and a stochastic frontier analysis approach to model the joint attainment of economic development, environmental sustainability, and energy equity. We apply our model to an unbalanced panel dataset of 29 European countries for the period 2005-2018. Our estimates show that the average performance of the European economies has improved throughout the studied period. However, the patterns of progress have been different, showing the non-EU-15 countries a steeper evolution than the EU-15 countries. Our results also highlight the pivotal role of a sustainable economic development with clean energies for both slashing CO2 emissions and fostering energy equity. Moreover, we find sigma convergence, being this slightly higher for the EU-15 countries. Additionally, we obtain absolute and conditional beta convergence for both non-EU-15 and EU-15 countries. Finally, we show that a higher share of renewable energy sources helps countries that are lagging behind to reach their optimal level of performance.
    Date: 2023
  7. By: Daniel Gallardo-Albarrán (Wageningen University)
    Abstract: This article reviews the proximate factors of human welfare since 1870 by discussing two strands of the economic history literature and identifying various key areas for further research. The first strand focuses on level accounting studies that attribute between-country economic inequality to differences in capital and productivity. I argue that most income gaps in the late 19th century were due to variation in physical and human capital endowments, while widening productivity differentials account for most of rising cross-country inequality during the 20th century. These patterns are likely explained by waves of skill- and capital- biased technological innovation, but additional research is needed to underpin these findings in, at least, three ways: capital and income series should be deflated by appropriate price indices, samples should include many more lower-income countries and methodologies could explore more realistic production functions. The second strand of the literature I review considers the measurement of long-run human development. Three approaches are popular among practitioners (capability, data-driven and utility frameworks), although there is still no consensus on which one to use. This makes it challenging to interpret broad trends in human welfare, as different well-being indices show contrasting patterns of growth and inequality. I argue that the field needs a more solid theoretical foundation to guide our choice of measurement frameworks. In this respect, utility-based indicators may be especially useful, as they address relevant issues raised in the literature, such as how to weight different dimensions, how individuals trade off between them, and how to interpret the results.
    Keywords: capital, productivity, human development, well-being, economic history
    JEL: I31 N00 N10 N30 O47
    Date: 2023–08

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