nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2024‒04‒22
twelve papers chosen by

  1. Productivity convergence and firm’s training strategy By Pardesi, Mantej
  2. Within-Firm Pay Inequality and Productivity By Melanie Wallskog; Nicholas Bloom; Scott W. Ohlmacher; Cristina Tello-Trillo
  3. When Did Growth Begin? New Estimates of Productivity Growth in England from 1250 to 1870 By Bouscasse, P.; Nakamura, E.; Steinsson, J.
  4. What Drives Profitability: Level or Growth Efficiency? By Misra, Biswa Swarup; Sahoo, Biresh
  5. Complementary inputs and industrial development: can lower electricity prices improve energy efficiency? By Singer, Gregor
  6. Multifactor productivity growth enhancers across industries and countries: Firm-level evidence By Nakatani, Ryota
  7. Assessing Technical Efficiency in Renewable Energy Consumption: A Stochastic Frontier Analysis with Scenario-Based Simulations By Abir Khribich; Rami H. Kacem; Damien Bazin
  8. ESG principles: the limits to green benchmarking By DiMaria, charles-henri
  9. Estimation of the imperfect substitutability between foreign workers and native residents in Japan By Jinno, Masatoshi
  10. Beauty and Professional Success: A Meta-Analysis By Kseniya Bortnikova; Tomas Havranek; Zuzana Irsova
  11. Impact of Some Innovative Programmes for Improving Agricultural Productivity– A Study in Arid Zones of West Bengal, India By Jana, Sebak Kumar; Payra, Tapas; Manna, Siddhartha
  12. Regulation and Frontier Housing Supply By Dan Ben-Moshe; David Genesove

  1. By: Pardesi, Mantej (ROA / Human capital in the region, RS: GSBE other - not theme-related research)
    Abstract: Productivity Convergence and Firm’s Training Strategy* In this paper, I study how converging to the productivity frontier influences a firm’s training investments. Although productivity growth induces a high-skill bias in firm’s workforce structure, little is known about its training incentives for vocational and technical skills. I address endogeneity in productivity growth using a two-stage control function approach where I use productivity shocks as exogenous changes to a firm’s position in intra-industry distribution. I find that closing the gap to the frontier leads to a negative effect on firm’s investment in training in vocational skills. The negative effect is stronger for large, multi-plant, innovative and technical advanced firms. Using a model for firm sponsored training, I explain the results via a technology effect, cost of training effect and labour substitution effect. First, productivity convergence induces technology upgradation that is skill biased against vocational skills. Second, high expected costs of training augments this skill-biasedness. Third, compositional shift in workforce induces firms to demand fewer vocational and technical skills.
    JEL: D24 D23
    Date: 2024–04–03
  2. By: Melanie Wallskog; Nicholas Bloom; Scott W. Ohlmacher; Cristina Tello-Trillo
    Abstract: Combining confidential Census worker and firm data, we find three key results. First, employees at more productive firms earn higher pay at all earnings levels. Second, this pay-productivity relationship strengthens with seniority, doubling from an elasticity of 0.07 for pay on productivity for the median-paid employee to 0.15 for the top-paid employee. Consequently, more productive firms have higher within-firm inequality. Our data suggests this is driven by their greater adoption of aggressive performance-pay bonus and management schemes. Finally, the magnitude of this pay-performance slope suggests rising productivity can explain 40% of the rise in within-firm inequality since 1980.
    JEL: J0
    Date: 2024–03
  3. By: Bouscasse, P.; Nakamura, E.; Steinsson, J.
    Abstract: We provide new estimates of the evolution of productivity in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. We develop and implement a new methodology for estimating productivity that accounts for these Malthusian dynamics. In the early part of our sample, we find that productivity growth was zero. Productivity growth began in 1600—almost a century before the Glorious Revolution. We estimate productivity growth of 3% per decade between 1600 and 1760, which increased to 6% per decade between 1770 and 1860. Our estimates attribute much of the increase in output growth during the Industrial Revolution to a falling land share of production, rather than to faster productivity growth. Our evidence helps distinguish between theories of why growth began. In particular, our findings support the idea that broad-based economic change preceded the bourgeois institutional reforms of 17th century England and may have contributed to causing them. We estimate relatively weak Malthusian population forces on real wages. This implies that our model can generate sustained deviations from the “iron law of wages†prior the Industrial Revolution.
    JEL: N13 O40 J10
    Date: 2023–03–07
  4. By: Misra, Biswa Swarup; Sahoo, Biresh
    Abstract: Examining the impact of ratio-based efficiency metrics, such as cost-to-income-ratio, and multifactor-based level efficiency on profitability can be potentially misleading. Our examination of Indian banks spanning the period from 2006 to 2023 reveals that profitability is significantly influenced by multifactor-based growth efficiency, rather than level efficiency. Notably, this finding remains robust when using either conventional or risk-adjusted measure of market power.
    Keywords: Profitability; Level efficiency; Growth efficiency; Lerner index; Indian banking
    JEL: D24 G21
    Date: 2024–03–03
  5. By: Singer, Gregor
    Abstract: The transition from traditional labor intensive to modern capital intensive production is a key factor for industrial development. Using half a million observations from Indian manufacturing plants, I analyze the effects of a secular decrease in industrial electricity prices through the lens of a model with technology choices and complementarities between electricity and capital inputs. Using instrumental variables, I show how lower industrial electricity prices can increase both labor productivity and electricity productivity. Apart from positive effects on firm economic and environmental performance, cost-price pass through significantly benefitted consumers, and the productivity improvements limited increases in carbon emissions.
    Keywords: industrial development; energy efficiency; electricity productivity; labor productivity; electricity prices; coal prices; incidence; climate policy
    JEL: Q41 D24 D20 O14
    Date: 2024–02–01
  6. By: Nakatani, Ryota
    Abstract: Multifactor productivity (MFP) growth is an imperative economic engine. MFP dynamism across five advanced and seven developing countries from 1996 to 2015 is analyzed, elucidating its association with financing and intangible assets. Debt is manifested by its inverted U-shaped nonlinear relationship with MFP advancement, while corporate cash holdings are negatively (positively) associated with MFP development in five (three) countries. The heterogeneous relationships between intangible assets and MFP growth are identified across industries, countries, and time; intangible assets are requisite MFP growth enhancers for manufacturing in developing countries, for service businesses in advanced countries, and for the period after the global financial crisis. The greater the productivity effect of intangible assets is, the higher a country’s per-capita income and/or governance quality becomes. Additionally, the results evince the catching-up of MFP to the technological frontier. Moreover, older firms exhibit slower MFP growth than their peers, whilst the positive effects of firm size on MFP growth are larger in high-tech and knowledge-intensive industries.
    Keywords: Industrial Analysis; Multifactor Productivity Growth; Cash Holding; Debt Financing; Knowledge and Technology Intensive Sectors; Intangible Assets
    JEL: D22 D24 G32 L25 L6 L8 M21 O34 O57
    Date: 2024–03–20
  7. By: Abir Khribich (Université Côte d'Azur, CNRS, GREDEG, France); Rami H. Kacem (Faculty of Economic Sciences and Management of Nabeul, University of Carthage, Tunisia; LEGI, Tunisia Polytechnic School); Damien Bazin (Université Côte d'Azur, CNRS, GREDEG, France)
    Abstract: This study introduces a pioneering approach marking the first comprehensive analysis explicitly designed to assess the technical efficiency of renewable energy consumption and its influencing factors. Based on data from 22 high-income countries covering the period 1996 to 2019 a Stochastic Frontier Analysis (SFA) was used to derive scores crafting a distinctive ranking of countries. Notably, Norway, Sweden, and Finland emerge as frontrunners, reflecting their efficiently robust approaches to renewable energy adoption. Empirical findings highlight the crucial role of financial development, revealing a significant and positive impact on increased renewable energy consumption efficiency. This is followed by other key factors such as institutional conditions and social development. Particularly, a non-linear impact was observed for other determinants, including trade openness, economic growth, and CO2 emissions. To explore more profoundly, the study projects six prospective scenarios, each exerting distinct influences on technical efficiency scores. Enhanced financial development, trade openness, and higher CO2 emissions are linked to elevated technical efficiency levels, albeit with variable effects among countries. Interestingly, increased growth in social development was associated to decreased technical efficiency scores, similarly, some countries experienced a counterproductive effect from a stimulated economic growth. Simulation results emphasize the imperative to address contextual variability, aiming to strike a balance between developmental objectives and optimizing the use of renewable energy.
    Keywords: Renewable energy consumption, Efficiency, Technical Efficiency, SFA, high-income countries
    JEL: Q20 Q28 Q48
    Date: 2024–03
  8. By: DiMaria, charles-henri
    Abstract: Taxonomy and efficiency assessments provide financial intermediaries (FIs) with guidance to grant funds according to the Environmental, Social and Governance principles. The EBRD provides a classification of industries according to a priori potential risk (low, medium or high). Using a panel of 28 industries in Luxembourg (2008-2019) and National Account data (NA), we challenge this taxonomy. We compute Data Envelopment Analysis (DEA) efficiency scores indicating if an industry could increase output while simultaneously lowering the emission of greenhouse gases. Our results show that EBRD low risk industries are the most efficient ones. Surprisingly, high-risk industries are more efficient than medium-risk ones, suggesting a potential unintended outcome of the EBRD taxonomy—limiting credit to industries classified as high risk that are in fact more efficient than industries classified as medium risk.
    Keywords: EBRD Risk taxonomy; Social acceptance; efficiency; bad output; credit rationing; ESG
    JEL: C44 G11 Q51
    Date: 2024
  9. By: Jinno, Masatoshi
    Abstract: This paper examines the imperfect substitutability between foreign workers and native residents in Japan. It utilizes a production function to analyze how foreign workers impact native wage rates, employing data from Japan's Basic Wage Structure Survey. The study finds significant, yet theoretically unexpected results regarding the wage rate and annual income ratios between native and foreign workers. Despite the significance of its findings, the paper acknowledges limitations and the need for further research, especially concerning classification by residency status.
    Keywords: Foreign Workers, Imperfect Substitutability, Productivity
    JEL: J31 J61
    Date: 2024–02–28
  10. By: Kseniya Bortnikova (Charles University, Prague); Tomas Havranek (Charles University, Prague & Centre for Economic Policy Research, London & Meta-Research Innovation Center, Stanford); Zuzana Irsova (Charles University, Prague)
    Abstract: Common wisdom suggests that beauty helps in the labor market. We show that two factors combine to explain away the mean beauty premium reported in the literature. First, correcting for publication bias reduces the premium by at least a third. Second, controlling for cognitive ability negates the premium for all occupations except sex workers, a point further underscored by the similarity of the beauty effect on earnings and productivity. The second factor implies a positive link, perhaps genetic, between beauty and intelligence. We find little evidence of substantial attenuation bias that could offset publication and omitted- variable biases. The empirical literature is inconsistent with discrimination based solely on tastes for beauty. To obtain these results we collect 1, 159 estimates of the effect of beauty on earnings or productivity reported in 67 studies and codify 33 aspects that reflect estimation context, including the potential intensity of attenuation bias. We employ recently developed techniques to account for publication bias and model uncertainty.
    Keywords: energy Beauty premium, productivity, meta-analysis, model uncertainty, publication bias
    JEL: C83 J24 J31
    Date: 2024–04
  11. By: Jana, Sebak Kumar; Payra, Tapas; Manna, Siddhartha
    Abstract: India at present faces a daunting challenge to provide food security to the burgeoning population. Rainfed areas falling mostly in arid zones accounts 60% of the total cultivated area in India. More than one-third share of the total population in the arid zone of India is below the poverty line. There is an urgent need to explore the possibilities of adopting innovative techniques of production in agriculture in the arid zones. The present paper provides some cases of innovative technologies to improve agricultural productivity in the arid zones in India. The innovative technologies that have been considered here are Happa, System of Rice Intensification (SRI), rain shelter, and mango orchard. The paper highlights the economics of these technologies for tribal households in the study area of Nayagram Block in Jungle Mahal in the state of West Bengal in India. All these technologies have been found to be economically beneficial for the farmer households in the arid zones under study.
    Keywords: Innovative technology, SRI, Happa, Rain shelter, Orchard, Agricultural productivity, Arid Zone, India
    JEL: O30
    Date: 2024–02–22
  12. By: Dan Ben-Moshe (BGU); David Genesove (The Hebrew University of Jerusalem)
    Keywords: Housing, regulation, stochastic frontier, real estate
    Date: 2023

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