nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2024‒03‒04
twelve papers chosen by

  1. Learning by Doing, Productivity, and Growth: New Evidence on the Link between Micro and Macro Data By Brad R. Humphreys; Scott Schuh; Corey J.M. Williams
  2. Productivity, innovation and economic growth: understanding the embodied and disembodied contributions of factor inputs By Perilla Jiménez, Juan Ricardo
  3. Synergy in environmental compliance, innovation and export on SMEs' growth By Phu Nguyen-Van; Tuyen Tiet; Quoc Tran-Nam
  4. L’impact de l’inflation sur la distribution des gains de productivité de l’agriculture française By Jean-Philippe Boussemart; Salomé Kahindo; Raluca Parvulescu
  5. Advancing Hospital Sustainability: A Multidimensional Index Integrating ESG and Digital Transformation By Takeda, Midori; Xie, Jun; Kurita, Kenichi; Managi, Shunsuke
  6. Strapped for cash: the role of financial constraints for innovating firms By Bøler, Esther Ann; Moxnes, Andreas; Ulltveit-Moe, Karen Helene
  7. Declining Responsiveness at the Establishment Level: Sources and Productivity Implications By Russell W. Cooper; John Haltiwanger; Jonathan L. Willis
  8. Cloud Computing and Extensive Margins of Exports - Evidence for Manufacturing Firms from 27 EU Countries By Joachim Wagner
  9. Does green innovation crowd out other innovation of firms? Based on the extended CDM model and unconditional quantile regressions By Yi Yiang; Richard S. J. Tol
  10. The need for an industrial policy for long-term growth By Anyfantaki, Sofia; Caloghirou, Yannis; Dellis, Konstantinos; Karadimitropoulou, Aikaterini; Petroulakis, Filippos
  11. Board Gender Diversity And Bank Performance During Covid-19: Did Women Save The Day? By Yuliana Loginova; Maria Semenova
  12. Unintended Consequences? The Changing Composition of Immigration to the UK after Brexit By Portes, Jonathan

  1. By: Brad R. Humphreys (West Virginia University); Scott Schuh (West Virginia University); Corey J.M. Williams (Shippensburg University)
    Abstract: Research suggests athletic performances are well-measured proxies for technological progress. This paper uses a century of auto and foot racing data to analyze technological changes in microeconomic learning-by-doing (LBD), observed as declining elapsed times, and macroeconomic aggregates like total factor productivity (TFP). The pace of LBD in athletics also declined around the 1973 Productivity Slowdown and varies widely across time and athletes. Auto racing speeds mainly reflect technological changes in capital (cars) and share a common stochastic trend with TFP (cointegration). Speeds error correct to TFP, but not vice versa, affirming TFP diffusion assumed in basic macro growth models.
    Keywords: Technological progress; learning by doing; TFP; labor productivity; autoracing, track and  field, RBC model, cointegration, error correction, Indianapolis 500;NHRA Winternationals
    JEL: O47 O33 E24 D24 C32 C22
  2. By: Perilla Jiménez, Juan Ricardo (Fundación Universidad del Norte)
    Abstract: The role of productivity measurement in the assessment of the decoupling hypothesis–which suggests divergent paths between productivity and the labor income share–is investigated using a detailed dataset on quality-adjusted-production-factors across economic sectors in the Colombian economy over 1990-2019. The quality adjustment is found to increase the contribution of production factors, and to attenuate the contribution of productivity to value added growth. Cointegration relationships between alternative productivity indicators and the labor share do not hold at the aggregate level. But they hold for a number of industries. Short-run robust negative relationships arise for all sectors. But comparison between alternative measures of productivity leads to conclude that quality adjusted measures of productivity has the potential to improve model specification on the econometric assessment of the decoupling effect.
    Keywords: Productivity; growth accounting; time series cointegration; panel data
    JEL: O22 O23 O40 O47 O57
    Date: 2023–05–05
  3. By: Phu Nguyen-Van; Tuyen Tiet; Quoc Tran-Nam
    Abstract: Although numerous studies examine the impacts of environmental compliance and innovation on a firm's economic performance, the role of export activities in this nexus has remained unanswered. In this study, we revisit the Porter hypothesis by investigating synergy strategies of dierent environmental and economic practices (i.e., environmental compliance, product innovation, process innovation and having export activities) on total factor productivity (TFP) of Vietnamese manufacturing SMEs. Our results suggest that while encouraging either product or process innovation is also essential in the environment-promoting policy, joint implementation of these two practices should be carefully considered by managers. Moreover, entering export markets positively impacts rms' productivity; complying with the domestic/local environmental standards could signicantly increase the chances for SMEs to enter the export markets
    Keywords: Environmental compliance; Export; Product innovation; Process innovation; Productivity; SMEs
    JEL: L25 M11 O12 Q55 Q56
    Date: 2024
  4. By: Jean-Philippe Boussemart (Univ. Lille, CNRS, IESEG School of Management, UMR 9221 – LEM, F-59000, France); Salomé Kahindo (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 – LEM, F-59000, France); Raluca Parvulescu (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 – LEM, F-59000, France)
    Abstract: It is imperative to consider the impact of monetary erosion when examining the distribution of productivity gains through variations in the prices of inputs and outputs within the agricultural sector. In this study, we will utilize productivity surplus accounts to comprehensively analyze how monetary erosion affects the allocation of price advantages among stakeholders involved in agricultural production. In light of the current backdrop of resurging general inflation and a reversal in food price trends, we then present an empirical analysis of productivity gains in the French agriculture sector spanning from 1959 to 2022. Our objective is to precisely assess how inflation affects the distribution of the productivity surplus among the various participants in the process, including customers, farmers, suppliers, the government, landowners, financial institutions, and others.
    Keywords: total factor productivity, surplus account, inflation, agriculture
    Date: 2024–01
  5. By: Takeda, Midori; Xie, Jun; Kurita, Kenichi; Managi, Shunsuke
    Abstract: Today, most healthcare costs in Japan depend on insurance premiums and public funds. Since the working population supports both groups, it will be difficult to maintain medical expenses in the future due to further declining birth rates and an aging society. Therefore, the sustainability of hospitals is a serious issue. While many methods have been developed to evaluate hospital performance and effectiveness, only some have been used to evaluate sustainability. Against this background, this study develops a comprehensive evaluation system that integrates ESG and digital transformation (DX) into a hospital efficiency and effectiveness assessment. We utilize open databases on hospital performance, financial reports, and scraped information disclosed on hospital websites. SBM (slack-based model)-DEA and super efficiency SBM-DEA were combined to assess hospital sustainability, including overall sustainability and three dimensions of hospital efficiency, effectiveness, and ESG/DX. The results showed that ESG/DX performance, efficiency, and effectiveness positively correlated with hospital sustainability in all groups of hospitals. It also showed that while effectiveness and ESG/DX performance positively contribute to operational efficiency in smaller hospitals, ESG/DX performance negatively contributes to profitability. In rehabilitation hospitals, effectiveness contributes negatively to profitability, indicating that improving effectiveness requires more significant costs than in other hospitals. These findings indicated that while ESG, DX, and effectiveness improve hospital sustainability, the costs of promoting ESG/DX are significant for smaller and rehabilitation hospitals. This index could benefit hospital management and policy recommendations regarding promoting ESG and DX.
    Keywords: Hospital; Sustainability; ESG; SBM-DEA; Super-efficiency DEA
    JEL: D24 M14
    Date: 2024
  6. By: Bøler, Esther Ann; Moxnes, Andreas; Ulltveit-Moe, Karen Helene
    Abstract: This paper makes use of a reform that allowed firms to use patents as stand-alone collateral, to estimate the magnitude of collateral constraints and to quantify the aggregate impact of these constraints on misallocation and productivity. Using matched firm-bank data for Norway, we find that bank borrowing increased for firms affected by the reform relative to the control group. We also find an increase in the capital stock, employment and innovation as well as equity funding. We interpret the results through the lens of a model of monopolistic competition with potentially collateral constrained heterogeneous firms. Parameterizing the model using well-identified moments from the reduced form exercise, we find quantitatively large gains in output per worker in the sectors in the economy dominated by constrained (and intangible-intensive) firms. The gains are primarily driven by capital deepening, whereas within-industry misallocation plays a smaller role.
    Keywords: intangible capital; patents; credit constraints; misallocation; productivity
    JEL: G32 L25 O34 O47
    Date: 2023–03–14
  7. By: Russell W. Cooper; John Haltiwanger; Jonathan L. Willis
    Abstract: This paper studies competing sources of declining dynamism. Evidence shows that an important component of this decline is accounted for by the reduction in the response of employment to shocks in US establishments. Using a plant-level dynamic optimization problem as a framework for analysis, four potential reasons for this decline are studied: (i) a change in exogenous processes for profits, (ii) an increase in impatience, (iii) increased market power, and (iv) increasing adjustment costs. We identify and quantity the contribution of each of these factors building on a simulated method of moments estimation of our structural model. Our results indicate that the reduction in responsiveness largely reflects increased costs of employment adjustment. Changes in market power, as captured by changes in the curvature of the revenue function, play a minimal role. But, in the presence of rising adjustment costs, measured sales-weighted markups using the recently popular indirect production approach rise substantially, along with rising dispersion and skewness of such measured markups.
    Keywords: declining dynamism; adjustment costs; employment
    JEL: E24 E32 J23
    Date: 2024–02–14
  8. By: Joachim Wagner (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre and Kiel Centre for Globalization)
    Abstract: The use of cloud computing by firms can be expected to go hand in hand with higher productivity, more innovations, and lower costs, and, therefore, should be positively related to export activities. Empirical evidence on the link between cloud computing and exports, however, is missing. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union taken from the Flash Eurobarometer 486 survey conducted in February – May 2020 to investigate this link. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use cloud computing do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated cloud computing premium for extensive margins of exports is statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of this premium can be considered to be large. Extensive margins of exports and the use of cloud computing are positively related.
    Keywords: Cloud computing, exports, firm level data, Flash Eurobarometer 486, kernel-regularized least squares (KRLS)
    JEL: D22 F14
    Date: 2024–02
  9. By: Yi Yiang; Richard S. J. Tol
    Abstract: In the era of sustainability, firms grapple with the decision of how much to invest in green innovation and how it influences their economic trajectory. This study employs the Crepon, Duguet, and Mairesse (CDM) framework to examine the conversion of R&D funds into patents and their impact on productivity, effectively addressing endogeneity by utilizing predicted dependent variables at each stage to exclude unobservable factors. Extending the classical CDM model, this study contrasts green and non-green innovations' economic effects. The results show non-green patents predominantly drive productivity gains, while green patents have a limited impact in non-heavy polluting firms. However, in high-pollution and manufacturing sectors, both innovation types equally enhance productivity. Using unconditional quantile regression, I found green innovation's productivity impact follows an inverse U-shape, unlike the U-shaped pattern of non-green innovation. Significantly, in the 50th to 80th productivity percentiles of manufacturing and high-pollution firms, green innovation not only contributes to environmental sustainability but also outperforms non-green innovation economically.
    Date: 2024–01
  10. By: Anyfantaki, Sofia; Caloghirou, Yannis; Dellis, Konstantinos; Karadimitropoulou, Aikaterini; Petroulakis, Filippos
    Abstract: We document and analyse key deficiencies of the Greek economy, with the view to providing new insights and articulate policy proposals. We consider issues which are the purview of both horizontal policies, raising productivity across sectors, and vertical policies, which allow for realignment of activity. With respect to the first dimension, we focus on two specific problem-areas of Greek industry, with high importance: skills and management practices. We also use information from a novel survey on entrepreneurship, technological developments, and regulatory change and examine structural characteristics of innovation and technology adoption of Greek firms, with a focus on the role of size, ownership structure, and global value chain participation. With respect to the second dimension, we provide an overview of Greece’s export performance and analyse its sectoral comparative advantage. In an empirical study we also focus on the determinants of export sophistication. Overall, the collection of our empirical findings provides ample fodder for concrete policy proposals to increase productivity in Greek manufacturing.
    Keywords: skills; management; innovation; knowledge; export sophistication
    JEL: D20 F10 J24 J50 L22 O32
    Date: 2024–02–01
  11. By: Yuliana Loginova (National Research University Higher School of Economics); Maria Semenova (National Research University Higher School of Economics)
    Abstract: This paper explores the impact of board gender diversity on bank performance during the COVID-19 crisis. Using data from 87 European banks from 2015 to 2021, we show that the presence of women on bank boards had a positive impact on bank profitability during the COVID-19 crisis. This effect is more pronounced in countries where the morbidity rate is higher. Our results suggest a negative relationship between the women on bank boards and bank credit risk during the pandemic. The impact of women on insolvency risk, however, appears only for banks with relatively large boards.
    Keywords: board gender diversity, COVID-19, bank profitability, credit risk
    JEL: G21 G34 O16
    Date: 2024
  12. By: Portes, Jonathan (King's College London)
    Abstract: The end of free movement and the introduction of the post-Brexit migration system represent the most important changes to the UK migration system in half a century. Coinciding with the aftereffects of the pandemic, the result has been very large changes both to the numbers of those coming for work and study, and to their composition, both in terms of countries of origin and in the sectors and occupations of new migrants. It has also resulted in a political backlash, resulting in significant further changes to the system announced in December 2023. I discuss the evidence to date of the impact of recent migration trends on the UK economy and labour market, distinguishing between different sectors.
    Keywords: migration, productivity, labour markets, Brexit
    JEL: F22 J48 J61 J68
    Date: 2024–01

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