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on Efficiency and Productivity |
| By: | Gagliardi, Nicola (Free University of Brussels); Grinza, Elena (University of Turin); Rycx, François (Free University of Brussels) |
| Abstract: | We investigate the impact of rising temperatures on firm productivity using longitudinal firm-level balance-sheet data from private sector firms in 14 European countries, combined with detailed weather data. Our findings, based on control-function techniques and fixed-effects regressions, reveal that global warming significantly and negatively impacts firms' TFP. Labor productivity declines markedly as temperatures rise, while capital productivity remains unaffected – indicating that TFP is primarily affected through the labor input channel. Sensitivity tests show that firms involved in outdoor activities, such as agriculture and construction, are more adversely impacted. Manufacturing, capital-intensive, and blue-collar-intensive firms also experience significant productivity declines. Geographically, the negative impact is most pronounced in temperate and mediterranean climate areas. |
| Keywords: | climate change, global warming, firm productivity, Total Factor Productivity (TFP), semiparametric methods to estimate production functions, longitudinal firm-level data |
| JEL: | D24 J24 Q54 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17241 |
| By: | António Afonso; Ana Patricia Montes Caparrós; José M. Domínguez |
| Abstract: | In this paper, we estimate the potential tax burden in a panel data set comprising OECD countries over the period 2000-2021. To this end, we use non-parametric and parametric techniques: Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA). In this way, it will be possible for us to identify which countries are close to their potential tax capacity and which are far from it. Moreover, we can determine whether they may sustain an increase (decrease) in their actual tax burden depending on whether the tax effort ratio is lower or higher relatively to other similar countries in the sample. Non-parametric and parametric results coincide rather closely on the positioning of the countries vis-à-vis the production possibility frontier and on their relative distances to the frontier. Efficient countries most of the times are: Belgium, Colombia, Finland, France, Italy, Latvia, Slovak Republic, and Sweden. |
| Keywords: | OECD; tax burden; tax efficiency; Stochastic Frontier Analysis; Data Envelopment Analysis. |
| JEL: | C14 C23 H20 H21 H30 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp03392024 |
| By: | Görg, Holger; Mulyukova, Alina |
| Abstract: | This paper exploits time and geographic variation in the adoption of Special Economic Zones in India to assess the direct effects of the program on firm performance. We combine geocoded firm-level data and geocoded SEZs. Our analysis yields that conditional on controlling for initial selection based on observables, the establishment of new SEZs did not induce any discernible positive effect on the productivity growth of firms in the SEZs. To explain this, we focus on the possibility of distortions through non-profitable activities on the part of managers. We find that firms especially in publicly-owned SEZs decreased their productivity growth, while firms located in privately-owned SEZs experience productivity increases. We also show that directors of firms located inside the publicly-owned zones experienced a significant increase in their salary growth, which is not the case in privately-owned SEZs. Our findings are in line with the idea that the possibility of rent-seeking by managers leads to distortions in program implementation. |
| Keywords: | Special Economic Zones, Firm performance, India |
| JEL: | O18 O25 P25 R10 F21 F60 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302102 |
| By: | Gabe, Todd; Hunt, Elinor; Crawley, Andrew |
| Abstract: | This paper examines the perceived effects of technology use on the employment, revenue, and productivity of US manufacturers. Results from a 2023 survey of US manufacturers (n=268) show that 48% of the surveyed businesses perceive that technology use has “no effect” on employment, 16% perceive positive impacts and 12% feel that technology use lowers the number of workers employed by the business. By contrast, only 21% of the surveyed US manufacturing businesses believe that technology use has no effect on the company’s annual revenue, 50% perceive positive impacts, while just 5% feel that technology use has a negative impact on revenue. Taken together, survey results suggest that technology use increases the productivity of a hypothetical US manufacturing business by an average of 9.2%. When companies that do not use technology are removed from the analysis, the perceived positive impact of technology use on productivity rises to an average of 12.1%. Future research will take a more in-depth look at the effects of technology on manufacturing productivity, with a focus on the differential impacts of specific types of technology. |
| Keywords: | Technology use, US manufacturing, productivity |
| JEL: | L60 O32 O33 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121919 |
| By: | Jeremy Pearce; Liangjie Wu |
| Abstract: | We study the interaction of customer capital and productivity through brand reallocation across firms. We develop a firm dynamics model with brands as transferable customer capital, heterogeneous firm productivity, and variable markups. We study the matching process between transferable brand capital and core productivity, which can be inefficient with significant welfare implications. We link USPTO trademark data with Nielsen sales data to study the prevalence of brand reallocation and the response of sales and prices to reallocation. Quantitatively, brand reallocation reduces welfare. Optimal policies deviate substantially from the literature due to the complementarity between brand capital and productivity. |
| Keywords: | firm dynamics; productivity; market concentration; product innovation; reallocation; Mergers & acquisitions; brands; Trademarks; intangible assets |
| JEL: | O31 O32 O34 O41 D22 D43 L11 L13 L22 |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:98772 |
| By: | Chris Tofallis |
| Abstract: | When comparing performance (of products, services, entities, etc.), multiple attributes are involved. This paper deals with a way of weighting these attributes when one is seeking an overall score. It presents an objective approach to generating the weights in a scoring formula which avoids personal judgement. The first step is to find the maximum possible score for each assessed entity. These upper bound scores are found using Data Envelopment Analysis. In the second step the weights in the scoring formula are found by regressing the unique DEA scores on the attribute data. Reasons for using least squares and avoiding other distance measures are given. The method is tested on data where the true scores and weights are known. The method enables the construction of an objective scoring formula which has been generated from the data arising from all assessed entities and is, in that sense, democratic. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.02087 |
| By: | Alexandra Tsvetkova |
| Abstract: | To mark the 40th anniversary of the OECD Local Employment and Economic Development (LEED) Programme, this paper examines determinants and consequences of employment resilience, or lack of, in European NUTS3/TL3/TL3 regions over the last 40 years. Descriptive evidence shows that the least resilient regions (those with the largest percentage drop in employment during a recession) slip to persistently lower post-recession employment-to-population ratio trajectories. On the other hand, regions with higher productivity pre-recession lost proportionally fewer jobs during a recession and were more likely to recover to the pre-recession employment levels (except for the recession induced by the COVID-19 pandemic). Overall, the findings point to the ability of productivity to serve as a shield against negative employment impacts of economic crises. |
| JEL: | J01 O18 R11 |
| Date: | 2024–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:oec:cfeaaa:2024/08-en |
| By: | Görg, Holger; Lehr, Jakob |
| Abstract: | This paper, for the first time, investigates the impact of foreign acquisitions on German manufacturing firms using, newly available unique administrative micro data spanning 25 years. Based on an event study design combined with propensity score matching techniques, we find that foreign acquisitions significantly increase labor productivity and average wages in acquired firms. A reduction in employment drives both effects. |
| Keywords: | Foreign direct investment, Foreign acquisitions, Firm behavior, Ex-post evaluation |
| JEL: | F23 F61 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302104 |
| By: | Yuechen Wu |
| Abstract: | The analysis of determinants of a company's financial performance has aroused significant attention, particularly, the environmental, social, and governance (ESG) has been the research focus in recent years. In addition to increasing revenue, the cruise industry has actively embraced the initiative of "green shipping". This study investigates the relationship between ESG and corporate financial performance (CFP) in the global cruise sector. This paper utilizes the sample data from the world's largest cruise companies over 2012-2023, to examine the ESG-CFP relationship by a regression model. The results indicate that ESG practices in cruise companies negatively influence CFP, which is further impacted by financial constraints. Furthermore, the heterogeneity analysis suggests that the high time interest earned (TIE) ratios and low total annual greenhouse gas (GHG) emissions worsen the adverse impacts of ESG on CFP. These findings contribute to the theoretical research on ESG and provide practical guidance for cruise industry operators and investors in their decision-making. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.00758 |
| By: | Gaelle Lenormand (UR - Université de Rennes); Hoang Nguyen (Huế University); Lionel Touchais (UR - Université de Rennes) |
| Abstract: | The discretionary nature of alternative performance measures raises the question of their information content, particularly in the European Union where, unlike the United States, there is no specific regulation but only a recommendation without coercive power. Based on hand-collected data in press releases of French and UK firms, we show that non-GAAP earnings measures are more informative compared with GAAP counterparts. However, the alternative performance measures may be used opportunistically when firms fall short of certain accounting earnings benchmarks. |
| Abstract: | L'objectif de l'article est d'analyser le contenu informationnel des indicateurs alternatifs de performance publiés dans le contexte européen au travers d'une analyse comparée de la France et du Royaume-Uni. À partir de données collectées manuellement dans les communiqués de presse, nous constatons que les mesures de résultat non-GAAP aboutissent à une information financière de meilleure qualité que les mesures comptables correspondantes. Ce résultat est plus prononcé pour les firmes britanniques que les entreprises françaises. Ces indicateurs alternatifs de performance peuvent toutefois être utilisés de manière opportuniste dans des situations à risque lorsque les groupes n'atteignent pas certains seuils de résultats comptables. |
| Keywords: | informativeness, alternative performance measures, accounting earnings benchmarks, non-GAAP earnings, indicateurs alternatifs de performance, contenu informationnel, seuils de résultats comptables, résultat non-GAAP |
| Date: | 2023–12–14 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04672673 |
| By: | Alejandro Fernández Cerezo (BANCO DE ESPAÑA); Borja Fernández-Rosillo San Isidro (BANCO DE ESPAÑA); Natividad Pérez Martín (BANCO DE ESPAÑA) |
| Abstract: | The availability of a firm-level database that is representative of the productive sector of an economy on an aggregate scale is increasingly important to analyse the heterogeneity of different economic variables at different levels of aggregation (for instance, by region, firm size or sector). This paper seeks, first, to evaluate the representativeness of the Banco de España’s Integrated Central Balance Sheet Database (Integrated CBSO database or CBI by its Spanish initials) for conducting regional analysis with firm-level data and, second, to analyse the differences in firm size distribution between the Spanish regions. |
| Keywords: | firm data, firm size distribution, financial reporting |
| JEL: | C81 D21 L11 R11 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:bde:opaper:2429e |
| By: | Muhammad Javid (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | The main objective of this paper is twofold. First, we attempt to identify the main determinants of domestic water demand in Saudi Arabia. In this respect, we estimate two sets of water demand models for Saudi Arabia from 1994 to 2021. In the first model, we estimate water demand as a function of water price, income, and population. In the second model, we add water-use efficiency (WUE) as an additional variable to examine its role in future domestic water demand. Second, our goal is to project the domestic water demand of Saudi Arabia by 2050 using estimated models 1 and 2. |
| Date: | 2024–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:prc:dpaper:ks--2024-dp05 |
| By: | Jose Asturias; Marco Sanfilippo; Asha Sundaram |
| Abstract: | We study the impact of FDI on domestic welfare using a model of internal trade with variable markups that incorporates intranational transport costs. The model allows us to disentangle the various channels through which FDI affects welfare. We apply the model to the case of Ethiopian manufacturing, which received considerable amounts of FDI during our study period. We find substantial gains from the presence of foreign firms, both in the local market and in other connected markets in the country. FDI, however, resulted in a modest worsening of allocative efficiency because foreign firms tend to have significantly higher markups than domestic firms. We report consistent findings from our empirical analysis, which utilises microdata on manufacturing firms, information on FDI projects, and geospatial data on improvements in the road network. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-45 |