nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2023‒11‒27
eight papers chosen by

  1. The impact of Covid-19 on productivity By Nicholas Bloom; Philip Bunn; Paul Mizen; Pawel Smietanka; Gregory Thwaites
  2. FDI spillovers and productivity in Vietnamese manufacturing industries - New insights from the unconditional quantile regression By Thanh Tam Nguyen-Huu
  3. Health Spending Efficiency in Developing Asia By Bajaro, Donna Faye; Jinjarak, Yothin; Myoda, Yuho; Park, Donghyun; Quising, Pilipinas
  4. Making the invisible hand visible: Managers and the allocation of workers to jobs By Virginia Minni
  5. The Hitchhiker's guide to markup estimation By Basile Grassi; Giovanni Morzenti; Maarten de Ridder
  6. The Relationship of Green Office Buildings to Occupant Productivity and Organisational Performance By Saul Nurick; Andrew Thatcher
  7. FDI and superstar spillovers: Evidence from firm-to-firm transactions By Mary Amiti; Cedric Duprez; Jozef Konings; John Van Reenen
  8. Systematic literature review: theory on GVCs' impact on wages, employment, and productivity By Sabina Szymczak

  1. By: Nicholas Bloom; Philip Bunn; Paul Mizen; Pawel Smietanka; Gregory Thwaites
    Abstract: We analyse the impact of Covid-19 on productivity using data from an innovative monthly firm survey panel that asks for quantitative impacts of Covid on inputs and outputs. We find total factor productivity (TFP) fell by up to 5% during 2020-21. The overall impact combined large reductions in 'within-firm' productivity, with an offsetting positive 'between-firm' effects as less productive sectors, and less productive firms within them, contracted. Despite these large pandemic effects, firms' post-Covid forecasts imply surprisingly little lasting impact on aggregate TFP. We also see significant heterogeneity over firms and sectors, with the greatest impacts in those requiring extensive in-person activity. We also ask about unmeasured inflation in the form of deteriorating product quality, finding an additional 1.4% negative impact on TFP.
    Keywords: Covid-19, Productivity
    Date: 2023–06–26
  2. By: Thanh Tam Nguyen-Huu (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie)
    Abstract: This research investigates the effects of FDI spillovers on the productivity of domestic firms by relying on unconditional quantile regression. Using panel data of Vietnamese enterprises over the period 2000–2012, we find evidence of positive spillovers for firms at the lower tails and negative spillovers for those at the upper tails of the productivity distribution. Time and the firm's legal status are other factors determining the effect of FDI spillovers. Notably, only low productivity state-own enterprises benefit from positive horizontal spillovers, but in the long run rather than in the short run.
    Keywords: FDI spillovers, Total factor productivity, Unconditional quantile regression
    Date: 2023–07–11
  3. By: Bajaro, Donna Faye (Asian Development Bank); Jinjarak, Yothin (Asian Development Bank); Myoda, Yuho (Asian Development Bank); Park, Donghyun (Asian Development Bank); Quising, Pilipinas (Asian Development Bank)
    Abstract: The coronavirus disease (COVID-19) pandemic placed health-care systems around the world under great stress. The sharp increase in demand for health care highlighted the importance of efficient health spending. The negative impact of the pandemic on global economic growth further strengthened the case for efficient health spending. In this paper, we examine health spending efficiency in developing Asia. Using data envelopment analysis, we find that East Asia has the highest average output- and input-oriented technical efficiency scores among the subregions. Universal health coverage service coverage index and population density have the strongest effect on health spending efficiency. In addition, using the novel framework of macro-level efficiency analysis, we find that developing Asia falls short of optimal total health expenditures. Caucasus and Central Asia has the highest average allocative efficiency score among the subregions. Overall, developing Asia has substantial room for improvement in both technical and allocative efficiency.
    Keywords: health spending; data envelopment analysis; technical efficiency; allocative efficiency
    JEL: C10 C60 H51 I10
    Date: 2023–10–27
  4. By: Virginia Minni
    Abstract: Why do managers matter for firm performance? This paper provides evidence of the critical role of managers in matching workers to jobs within the firm using the universe of personnel records from a large multinational firm. The data covers 200, 000 white-collar workers and 30, 000 managers over 10 years in 100 countries. I identify good managers as the top 30% by their speed of promotion and leverage exogenous variation induced by the rotation of managers across teams. I find that good managers cause workers to reallocate within the firm through lateral and vertical transfers. This leads to large and persistent gains in workers' career progression and productivity. Seven years after the manager transition, workers earn 30% more and perform better on objective performance measures. In terms of aggregate firm productivity, doubling the share of good managers would increase output per worker by 61% at the establishment level. My results imply that the visible hands of managers match workers' specific skills to specialized jobs, leading to an improvement in the productivity of existing workers that outlasts the managers' time at the firm.
    Keywords: managers, career trajectories, internal labor markets, productivity
    Date: 2023–10–09
  5. By: Basile Grassi; Giovanni Morzenti; Maarten de Ridder
    Abstract: Is it feasible to estimate firm-level markups with commonly available datasets? Common methods to measure markups hinge on a production function estimation, but most datasets do not contain data on the quantity that firms produce. We use a tractable analytical framework, simulation from a quantitative model, and firm-level administrative production and pricing data to study the biases in markup estimates that may arise as a result. While the level of markup estimates from revenue data is biased, these estimates do correlate highly with true markups. They also display similar correlations with variables such as profitability and market share in our data. Finally, we show that imposing a Cobb-Douglas production function or simplifying the production function estimation may reduce the informativeness of markup estimates.
    Keywords: Macroeconomics, Production Functions, Markups, Competition
    Date: 2022–12–20
  6. By: Saul Nurick; Andrew Thatcher
    Abstract: Green building advocates have stated that improved productivity is linked to green buildings, specifically due to enhanced indoor environmental quality (IEQ). Previous research indicated mixed results in this regard, and therefore conjecture still exists. The purpose of the research was to examine both individual productivity and organisational performance of occupants and businesses, respectively, located in green certified office buildings in South Africa. The research focused on financial services companies (FSCs), where each FSC offered a low, moderate and high risk investment product. Quantitative research was conducted on ten FSCs located in nineteen green certified and ten FSCs located thirteen conventional (non-green) office buildings, to assess organisational performance. Qualitative research was conducted in the form of semi-structured interviews across two FSCs comprising fifteen knowledge workers, to assess individual productivity. The research was conducted within the context of a theoretical framework that focused on the implementation of green building features and initiatives (GBFIs) that focus on IEQ. There was a statistically significant positive relationship (high risk products) when comparing annualised returns to IEQ (Pearson’s Correlation). Interview respondents indicated that location and amenities contributed to organisational culture, collaboration spaces, employee attraction and retention, and safety. These attributes were contributed in some degree to individual productivity. The results continue to indicate that the relationship between enhanced IEQ and individual productivity and organisational performance are not absolute, as there may be external contributing factors.
    Keywords: Green building features and initiatives (GBFIs); Indoor environmental quality (IEQ); Performance; Productivity
    JEL: R3
    Date: 2023–01–01
  7. By: Mary Amiti; Cedric Duprez; Jozef Konings; John Van Reenen
    Abstract: Using firm-to-firm transactions, we show that starting to supply a 'superstar' firm (large domestic firms, exporters, and multinationals) boosts productivity by 8% in the medium run. Placebos on starting relationships with smaller firms and novel identification strategies support a causal interpretation of "superstar spillovers". Consistent with a model of technology transfer, we find falls in markups and bigger treatment effects from technology intensive superstars. We also show that the increase in new buyers is particularly strong within the superstar firm's network, a "dating agency" effect. This suggests an important role for raising productivity through superstars' supply chains regardless of their multinational status.
    Keywords: productivity, FDI, spillovers
    Date: 2023–04–27
  8. By: Sabina Szymczak (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This study presents a systematic literature review (SLR) to provide a collection of theories explaining the impact of global value chains (GVCs) on labour market outcomes. Due to the complex nature of GVCs and the interconnectedness of wages, employment, and productivity, many direct and indirect effects are at play. To ensure a transparent and systematic flow of the review process, I follow the PRISMA guide. Eventually, 36 records out of 1221 results from Scopus database were selected for full-text analysis. This SLR may be useful for theorists, empirical economists, and policy makers as an up-to-date overview of theoretical developments and convenient map of potential outcomes expected from involvement in GVCs. It identifies and systematizes a number of effects existing in the literature under various names. Additionally, it shows the shortcomings of the existing theories. They often adopt the perspective of developed country trading with developing one, while nowadays the intermediate trade occurs in many forms, affecting various actors. Less aggregated levels of analysis could be a great input to the discussion, as well as addressing different GVCs' dimensions and types of organisation. The understanding of relation between GVC position and labour market is especially worth exploration as the existing evidence adopt different and even contradicting perspectives on the definition of upgrading the GVC position.
    Keywords: systematic literature review, global value chains, wage, employment, productivity
    JEL: F16 F60
    Date: 2023–11

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