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on Efficiency and Productivity |
| By: | Sebaq, Mohamed |
| Keywords: | Production Economics, Productivity Analysis, Agribusiness |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343680 |
| By: | Mert Demirer; Ömer Karaduman |
| Abstract: | Using rich data on hourly physical productivity and thousands of ownership changes from US power plants, we study the effects of acquisitions on efficiency and underlying mechanisms. We find a 2% average increase in efficiency for acquired plants, beginning five months after acquisitions. Efficiency gains rise to 5% under direct ownership changes, with no significant change when only parent ownership changes. Investigating the mechanisms, three-quarters of the efficiency gain is attributed to increased productive efficiency, while the rest comes from dynamic efficiency through changes in production allocation. Our evidence suggests that high-productivity firms buy underperforming assets from low-productivity firms and make them as productive as their existing assets through operational improvements. Finally, acquired plants improve their performance beyond efficiency by increasing output and reducing outages. |
| JEL: | L22 L25 L40 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32727 |
| By: | Stephen Ayerst; Duc M. Nguyen; Diego Restuccia |
| Abstract: | We examine aggregate productivity differences across nations using cross-country firm-level data and a quantitative model of production heterogeneity with distortions featuring operation decisions (selection) and productivity-enhancing investments (technology). Empirically, less developed countries feature higher distortions and larger dispersion in firm-level productivity, mostly resulting from the higher prevalence of unproductive firms. Quantitatively, measured cross-country differences in the elasticity of distortions with respect to firm productivity generate the bulk of empirical patterns and over two-thirds of cross-country labor productivity differences. Both selection and technology channels are important. Variation in static misallocation also plays an important role, albeit smaller. |
| JEL: | O11 O14 O4 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32750 |
| By: | Mantey, Vida; Bosch, Christine; Missiame, Arnold; Birner, Regina; Birkenberg, Athena; Yameogo, Viviane Guesbeogo; Mburu, John |
| Abstract: | Dairy production is an important contributor to food security and poverty reduction, but it is also a major source of greenhouse gas (GHG) emissions. The development of smallholder agricultural carbon projects, such as the Mt. Elgon project, provides an opportunity for farmers to receive benefits for adopting sustainable practices that not only potentially increase farm productivity but also reduce GHG emissions. While there is growing evidence that agricultural cooperatives in conventional development projects improve the adoption of agricultural technologies and the economic performance of smallholder farms, there is a research gap on the role that dairy cooperatives can play in smallholder agricultural carbon projects. This study examines the role of dairy cooperatives in smallholder agricultural carbon projects and assesses the impact of cooperative membership on the technical efficiency of smallholder dairy carbon farmers in Western Kenya. The study used a mixed methods approach. A participatory and visual mapping tool, Net-Map, was used to identify key actors and their linkages. Stochastic frontier and endogenous switching regression models were used to estimate technical efficiency and assess the impact of cooperative membership on the technical efficiency of smallholder dairy carbon farmers, respectively. The results show that dairy cooperatives in carbon projects play an important role in project design and implementation, as well as in carbon monitoring and reporting. On average, smallholder farmers are 35.3 percent technically efficient, and cooperative members have lower technical efficiency than non-members. This finding can be attributed to the way these dairy cooperatives were set up and the fact that some farmers joined the cooperatives to participate in the project. Furthermore, an average treatment effect on the treated (ATT) and an average treatment effect on the untreated (ATU) of 0.311 and 0.251 respectively was observed. In general, the study concludes that without critical sources of heterogeneity, dairy cooperatives can support smallholder carbon farmers not only to improve their efficiency but also to promote sustainable dairy farming. |
| Keywords: | Livestock Production/Industries |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344343 |
| By: | Gulati, Kajal; Saha, Koustuv; Lybbert, Travis J. |
| Abstract: | Most studies on gender gaps in agricultural productivity leverage within-household differences between plots managed by women and men. Such a gender-based division of plot management simplifies empirical tests for productivity differences, but it is not a common arrangement for agricultural households outside some locations in sub-Saharan Africa. In most rural households, women and men jointly participate in production, which complicates identification of gender- based productivity differences. This study proposes a broader empirical test of productivity gaps that applies to such systems, and that is rooted not explicitly in gender but in gender-based inequities. Specifically, we explore productivity gaps in rice-cultivating Indian households, where women and men perform specific and distinct cultivation tasks. We measure productivity gaps based on the differential use of family and hired female labor across households, then compare them with gaps based on the differential use of family and hired male labor. Using plot-level data, we identify significant gender-based productivity gaps after controlling for input use, plot- and household-level characteristics, and using village fixed effects and machine learning estimators to address selection and model misspecification concerns. Based on this identification strategy, households using family female labor have lower agricultural productivity, on average, than those also hiring female workers, such that foregone production value is greater than the cost of hiring women. We find suggestive evidence that this gap stems from skill differences between hired and family female workers. In contrast, we find no evidence of a similar gap based on the differential use of family and hired male labor. Overall, household welfare is lower because of gender inequities that shape women's work opportunities. These findings highlight the potential productivity implications of expanding women's labor choices, including both on- and off-farm job opportunities. |
| Keywords: | Consumer/Household Economics, Farm Management, International Development |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344301 |
| By: | Seifert, Stefan; Wolff, Saskia; Hüttel, Silke |
| Abstract: | We analyze ecological improvement potentials of agricultural landscapes in North Rhine-Westphalia, Germany. Using an eco-efficiency approach, we model agricultural landscapes at a 20km² hexagonal grid. Ecological output is captured by indicators based on agricultural land cover data from the Integrated Administration and Control System. We derive measures for landscape configuration and composition including a Shannon crop diversity index, edge density, grassland shares, ecological focus areas, and landscape elements. We approximate economic output potential using local standard farmland values. Ecological improvement potentials are measured against a non-convex frontier estimated with the non-parametric, robust order-m estimator. We find overall high eco-efficiency of the agricultural landscapes; yet for the given economic output potential, landscapes could improve in the ecological direction. We detect spatially concentrated improvement potentials for single ecological indicators. Our results underline that eco-efficiency requires coordination at the landscape scale where directional improvement potentials can help designing locally adapted strategies. |
| Keywords: | Agribusiness |
| Date: | 2023–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gewi23:344236 |
| By: | Tarsia, Romano |
| Abstract: | This paper provides novel, firm-level estimates of the economic damages induced by temperature shocks. Leveraging European firm-level data, this study investigates the heterogeneity of damages across firms characteristics overlooked in aggregate analyses. The analysis consistently highlights negative (positive) impacts on the least (most) productive firms, contributing to both climate economics and the literature on aggregate productivity. Industry-specific effects indicate different susceptibilities across sectors to weather shocks. These results delve into the findings from the pooled sample which reveal a moderate U-shaped relationship between temperature and economic outcomes, suggesting significant adaptation for firms located in warmer areas. Temperature impacts on economic performance manifest with a lag, and varying persistence across firms. Methodologically, this work employs quantitative methods to address the potential drawbacks highlighted in the current climate econometrics discussion. |
| Keywords: | weather; climate change; firms; climate damages; economic performance |
| JEL: | D24 O13 O14 O52 Q51 Q54 R11 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124251 |
| By: | Brian D. Varian |
| Abstract: | At the time of Australian federation in 1901, Queensland’s manufacturing sector was considerably less productive than those of its southern neighbours: New South Wales and Victoria. It remained propped by a protectionist tariff policy that was the most trade-restrictive among the policies of all six colonies. The formation of the Australian customs union entailed both the free entry into Queensland of Australian goods and the replacement of Queensland’s colonial tariff by the Commonwealth’s common external tariff. Following a difference-indifferences approach across industries, this paper analyses the effect of Australian market integration, including the adoption of the common external tariff, on Queensland’s intraindustry growth in output, employment, labour productivity, total factor productivity, the number of factories, and average output per factory. This case study makes use of the annual, industry-specific output data reported by the colony—the only Australian colony to have done so both pre- and post-federation. The predictions of ‘new trade theory’ do not find much support in this case study. Nevertheless, the intensity of trade liberalisation was significantly and negatively associated with intra-industry growth in employment, to the extent that Queensland’s manufacturing employment would have been an estimated 11.4 per cent higher in 1906, but for federation. |
| Keywords: | Australia, customs union, federation, manufacturing, market integration, tariffs |
| JEL: | F12 F13 F15 N67 N77 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:auu:hpaper:122 |
| By: | Nor, N.A.A.M.; Buda, M.; Nor, N.M.; Seng, K.W.K.; Sharifuddin, J. |
| Abstract: | The broiler industry in Peninsular Malaysia faces significant challenges, including escalating production costs influenced by volatile feed prices, supply dependencies, and disruptions such as the COVID-19 pandemic. A comprehensive investigation was undertaken on 105 small and semi-commercial broiler farms in Peninsular Malaysia, employing structured questionnaires and a stratified random sampling approach. The study aimed to estimate the cost-efficiency of broiler farming and determine the factors affecting farm-level cost inefficiency. The findings confirm the presence of cost inefficiencies in small and semi-commercial broiler production in the area studied. Specifically, the research identified an operational inefficiency of approximately 7.1% above optimal costs among surveyed farms, suggesting a potential 7.1% reduction in production costs through enhanced management strategies. The findings indicate day-old chicks, feed, medicine, miscellaneous inputs, output, and capital significantly influenced cost function. Additionally, the study explored the significant role of extension services in reducing cost inefficiencies, with farms benefiting from such services exhibiting lower inefficiencies. In conclusion, this research provides critical insights into the complex relationships between efficiency drivers and inefficiencies within the broiler farming sector in Peninsular Malaysia. These identified factors offer valuable information for stakeholders to formulate effective strategies, optimize production processes, and enhance the competitiveness and sustainability of the industry. |
| Keywords: | Livestock Production/Industries, Production Economics, Sustainability |
| Date: | 2024–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:ags:asea24:344456 |
| By: | Lambarraa-Lehnhardt, Fatima |
| Abstract: | Climate change poses a threat to agricultural production in the Mediterranean region. Therefore, it is essential to build resilient and efficient farms to ensure food security and sustainable Mediterranean agriculture. Improved resilience of farms against climate shocks can enhance farm efficiency, depending on the farming system. Within the framework of the BIODIVER-SIFY project, the aim is to compare the resilience of different farming systems in the Mediterranean basin based on their diversification. To achieve this objective, a survey data is used from various case studies across the Mediterranean. The methodological approach is based on the impact of resilience capacity indicators on the technical efficiency of farms using the stochastic frontier model. The results show that the intensive farming system is more efficient, whereas the diversified farming system is more robust. Higher farm adaptability has a positive impact on the technical efficiency of diversified farming systems but a negative impact on the intensive ones. The results suggest trade-offs between resilience and farm efficiency that de-pend on the sustainability of the farming system. This study provides useful insights for farmers, policymakers, and researchers regarding the development of sustainable agricultural practices in the Mediterranean region. |
| Keywords: | Agricultural and Food Policy, Climate Change |
| Date: | 2023–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gewi23:344247 |
| By: | Agnes Norris Keiller; Tim Obermeier; Andreas Teichgraeber; John Van Reenen |
| Abstract: | When labour market competition is imperfect, positive industry (and firm) productivity shocks can be passed through to workers in the form of higher wages. We document how the UK auto industry, following a period of decline, experienced a four-decade-long productivity boom. There was a thirteen-fold increase in real output per worker between 1980 and 2018, compared to a four-fold increase in manufacturing. Greater foreign ownership, tougher competition and improved industrial relations all likely played a role. The greater use of intermediate inputs (outsourcing) and growing capital intensity account for most of this growth, but we estimate that TFP still grew three times as fast in the auto industry than the rest of manufacturing. Examining whether this productivity increase has been shared with employees, we find that auto workers experienced far stronger hourly wage growth than workers in the rest of manufacturing. After controlling for individual fixed effects, the auto wage premium relative to the rest of manufacturing doubled from 8% in the 1980s to 17% in the 2010s. Interpreted through the lens of a rent sharing model, we estimate that most of the wage increase (63% in the baseline case) can be accounted for by the auto productivity boom. In contrast, the bargaining power of UK auto workers seems to have fallen. If worker power had held up at the 1980s level, the wage premium would have been about 38% higher in the 2010s. |
| JEL: | L1 L6 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32695 |
| By: | Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw; Institute of Labor Economics (IZA); University of Warsaw; Group for Research in Applied Economics (GRAPE)); Katarzyna Bech - Wysocka (Group for Research in Applied Economics (GRAPE); Warsaw School of Economics) |
| Abstract: | We study the effects of gender board diversity on firm performance. We use novel and rich firm-level data covering over seven million private and public firms spanning the years 1995- 2020 in Europe. We augment a standard TFP estimation with firm fixed effects to explore the role of gender board diversity. We construct a shift-share instrument for gender board diversity and find that increasing the share of women on boards is conducive to better economic performance. The results prove robust to a variety of sensitivity analysis. This outcome is driven primarily by firms from the service sector and by smaller firms. The impact was stronger during the early years of our sample. |
| Keywords: | firm performance, gender board diversity |
| JEL: | J16 J88 D22 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fme:wpaper:95 |
| By: | Agnes Norris Keiller; Áureo de Paula; John Van Reenen |
| Abstract: | Standard methods for estimating production functions in the Olley and Pakes (1996) tradition require assumptions on input choices. We introduce a new method that exploits (increasingly available) data on a firm’s expectations of its future output and inputs that allows us to obtain consistent production function parameter estimates while relaxing these input demand assumptions. In contrast to dynamic panel methods, our proposed estimator can be implemented on very short panels (including a single cross-section), and Monte Carlo simulations show it outperforms alternative estimators when firms’ material input choices are subject to optimization error. Implementing a range of production function estimators on UK data, we find our proposed estimator yields results that are either similar to or more credible than commonly-used alternatives. These differences are larger in industries where material inputs appear harder to optimize. We show that TFP implied by our proposed estimator is more strongly associated with future jobs growth than existing methods, suggesting that failing to adequately account for input endogeneity may underestimate the degree of dynamic reallocation in the economy. |
| JEL: | C21 C23 L11 L23 O31 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32725 |
| By: | Francesco Filippucci; Peter Gal; Cecilia Jona-Lasinio; Alvaro Leandro; Giuseppe Nicoletti |
| Abstract: | This paper explores the economics of Artificial Intelligence (AI), focusing on its potential as a new General-Purpose Technology that can significantly influence economic productivity and societal wellbeing. It examines AI's unique capacity for autonomy and self-improvement, which could accelerate innovation and potentially revive sluggish productivity growth across various industries, while also acknowledging the uncertainties surrounding AI's long-term productivity impacts. The paper discusses the concentration of AI development in big tech firms, uneven adoption rates, and broader societal challenges such as inequality, discrimination, and security risks. It calls for a comprehensive policy approach to ensure AI's beneficial development and diffusion, including measures to promote competition, enhance accessibility, and address job displacement and inequality. |
| Keywords: | Artificial intelligence, Competition, Productivity |
| JEL: | O15 |
| Date: | 2024–04–16 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:15-en |