nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2024‒04‒08
seven papers chosen by

  1. Changing times: Incentive regulation, corporate reorganisations, and productivity in Great Britain’s gas networks By Victor Ajayi; Michael G. Pollitt
  2. Central Limit Theorems for Directional Distance Functions with and without Undesirable Outputs By Simar, Léopold; Zelenyuk, Valentin; Zhao, Shirong
  3. Holy Cows and Spilt Milk: The Impact of Religious Conflict on Firm-Level Productivity By Bentzen, Jeanet; Boberg-Fazlic, Nina; Sharp, Paul; Volmar Skovsgaard, Christian; Vedel, Christian
  4. Is Inflation Good for Business? The Firm-Level Impact of Inflation Shocks in the Baltics, 1997-2021 By Mr. Serhan Cevik; Alice Fan; Sadhna Naik
  5. The effectiveness of a certification of legality. Evidence from Italian firms By Alfano, Maria Rosaria; Cantabene, Claudia; de Iudicibus, Alessandro
  6. An Ounce of Prevention for a Pound of Cure: Basic Health Care and Efficiency in Health Systems By Bancalari, Antonella; Bernal, Pedro; Celhay, Pablo; Martinez, Sebastian; Sánchez, María Deni
  7. Labor markets, wage Inequality, and hiring selection By Pizzo, Alessandra; Villena-Roldán, Benjamin

  1. By: Victor Ajayi; Michael G. Pollitt
    Keywords: Total factor productivity, incentive regulation, corporate reorganisations, gas networks, data envelopment analysis
    JEL: C23 D24 L51 L94
    Date: 2022–09
  2. By: Simar, Léopold (Université catholique de Louvain, LIDAM/ISBA, Belgium); Zelenyuk, Valentin; Zhao, Shirong
    Abstract: We develop new central limit theorems (CLTs) for the aggregate directional distance functions (DDFs), which embed the CLTs for the aggregate efficiency and simple mean DDFs as special cases. Moreover, we develop new CLTs for the aggregate DDFs in the presence of the weak disposability of undesirable outputs. Our Monte-Carlo simulations confirm the good performance of statistical inference based on the new CLTs we have derived and illustrate how wrong the inference based on the standard CLTs can be. To our knowledge, this is the first study that provides both the asymptotic theory and the simulation evidence for the non-parametric frontier approaches when some outputs are undesirable. Finally, we provide an empirical illustration using a data set from large US banks as well as supply the computational code for alternative applications.
    Keywords: Inference ; Data Envelopment Analysis ; Non-parametric Efficiency Estimators ; Undesirable Outputs ; Weak Disposability
    JEL: C12 C13 C14
    Date: 2024–03–04
  3. By: Bentzen, Jeanet (University of Copenhagen, CAGE, CEPR); Boberg-Fazlic, Nina (TU Dortmund University, CEPR); Sharp, Paul (University of Southern Denmark, CAGE, CEPR); Volmar Skovsgaard, Christian (University of Southern Denmark); Vedel, Christian (University of Southern Denmark)
    Abstract: We consider the impact of non-violent religious conflict on firm-level productivity. We zoom in on a Protestant and otherwise very homogeneous country: early twentieth century Denmark. We exploit variation due to the emergence of pietist movements who fought for the hearts and minds of Danes. In the countryside, much of the religious debate concerned whether or not creameries - the main catalyst of the industrial revolution in Denmark - should be closed on Sundays in accordance with the Third Commandment. We construct a rich microlevel dataset for 964 creameries and combine this with various measures of the intensity of the religious conflict. Exploiting variation in preaching by a prominent religious figure, we provide plausibly causal evidence that religious conflict hampered firm-level productivity. Examining the mechanism, we proceed to demonstrate that the reduction in productivity is due to the religious conflict rather than whether or not the factory produced on Sundays.
    Keywords: Dairying, Denmark, productivity, religiosity JEL Classification: N33, N34, O12, O13, Z12
    Date: 2023
  4. By: Mr. Serhan Cevik; Alice Fan; Sadhna Naik
    Abstract: Using a large panel of firm-level data, this paper provides an analysis of how inflation shocks in the Baltics between 1997 and 2021 affected total factor productivity (TFP), gross profitability, and net fixed investment in nonfinancial sectors. First, we find that inflation and inflation volatility had mixed effects on TFP growth, profitability and net fixed investment in the first year as well as over the medium term, albeit at a dissipating rate. Second, focusing on subsamples, we find that inflation shocks had differential effects on large versus small firms. Third, we explore sectoral heterogeneity in how firms responded to inflation shocks and observe significant variation across tradable and non-tradable sectors. Finally, estimates from a state-dependent model suggest that firms’ response to inflation shocks varied with the state of the economy. The results suggest that nonfinancial firms in the Baltics have been agile in adjusting to inflation shocks, possibly by either transferring higher production costs to consumers or substituting inputs. Given the differences in the level and nature of the recent inflation shock and the sample period on which our analysis is based, empirical findings presented in this paper might not necessarily apply to the latest bout of inflation in the Baltics.
    Keywords: Inflation; firm performance; productivity; profitability; fixed investment; Baltics; Estonia; Latvia; Lithuania
    Date: 2024–03–01
  5. By: Alfano, Maria Rosaria; Cantabene, Claudia; de Iudicibus, Alessandro
    Abstract: Over the past decade, Italy has enacted a variety of measures to combat organized crime. White lists of legitimate businesses, established within each Italian prefecture, are a strategic tool to thwart mafia encroachment in the sectors most susceptible to infiltration. By replacing anti-mafia documentation, this mechanism fosters trust in the legality of enterprises among potential clients, suppliers, and financial institutions. Drawing on an extensive firm-level dataset, we employ a comprehensive, generalized difference-in-differences design to investigate the consequences of such certification on firms’ access to credit and their profitability. Our findings indicate that this certification engenders tangible positive effects on firms’ performance, manifested in improved credit access and enhanced profitability. Notably, the impact on banking obligations is particularly pronounced in regions where organized crime is more prevalent, such as the Southern regions of Italy. Conversely, the effect on profitability appears to be more accentuated in the North. These effects are more pronounced for firms that maintain certification over multiple years.
    Keywords: White List, Organized crime, Certification, Reputation, DID
    JEL: C21 H40 H81 R38
    Date: 2024
  6. By: Bancalari, Antonella; Bernal, Pedro; Celhay, Pablo; Martinez, Sebastian; Sánchez, María Deni
    Abstract: We examine the efficiency gains in health systems generated after the national roll out of basic healthcare in El Salvador between 2010 and 2013. Using data from over 120 million consultations and five million hospitalizations, we demonstrate that the expansion of community health teams, comprising less-specialized health workers, increases preventive care and decreases curative care and preventable hospitalizations. We also estimate coverage improvements for previously unattended chronic conditions amenable to effective primary care. These results suggest that decentralization of tasks to less-specialized health workers improves efficiency, maintaining quality of care.
    Keywords: community-based healthcare;efficiency;coverage
    JEL: I15 I18 H21 H51
    Date: 2024–01
  7. By: Pizzo, Alessandra; Villena-Roldán, Benjamin
    Abstract: Employers hire more selectively between heterogeneous productivity workers when applicants’ queues are longer. Consistently, CPS data reveal a positive and concave relation between unemployment rates and wage inequality. We rationalize intuition and evidence altogether using a nonsequential search model in which selective hiring stretches out the right tail of the wage distribution and compresses the left one. Using GMM estimated parameters, we show that mean worker productivity distribution shifts are consistent with the evidence. Welfare analysis suggests that regressive taxation may enhance efficiency because expected good matches stimulate vacancies, creating a positive externality for other job seekers.
    Keywords: Nonsequential search, Hiring, Inequality, Unemployment, Worker Flows, Efficiency
    JEL: E24 J64
    Date: 2024–02–23

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