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on Efficiency and Productivity |
| By: | Michele Battisti; Valentino Dardanoni; Stefano Demichelis |
| Abstract: | This paper studies inter-firm heterogeneity in production. Unlike much of the existing research, which primarily addresses heterogeneous production through unobserved fixed effects, our approach also focuses on differences in factors' output elasticities. Using manufacturing data from Chile, Colombia, and Japan, we apply an innovative Empirical Bayes methodology to estimate heterogeneous Cobb-Douglas production functions. We uncover substantial heterogeneity in both factor neutral productivity and factor elasticities, with a strong negative correlation between them. These findings are consistently observed across datasets and remain robust when using CES and intensive Cobb-Douglas specifications. We show that accounting for these features has significant implications for issues such as markup estimation, firms' technology adoption, and productivity measurement. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.15980 |
| By: | Joel Kariel; Anthony Savagar |
| Abstract: | We develop a theoretical framework to investigate the link between rising scale economies and stagnating productivity. Our model features heterogeneous firms, imperfect competition, and firm selection. We demonstrate that scale economies generated by fixed costs have distinct impacts on aggregate productivity compared to those driven by returns to scale. Using UK data, we estimate long-run increases in both fixed costs and returns to scale. Our model implies that this should increase aggregate productivity through improved firm selection and resource allocation. However, increasing markups can offset the productivity gain. Higher markups cushion low-productivity firms' revenues, allowing them to survive, and constrain firm output, which limits exploitation of scale economies. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.18461 |
| By: | Pérez Reyna, David (Universidad de los Andes); Rozada-Najar, Angie (Banco de la República); Suaza, Fausto (Universidad de los Andes) |
| Abstract: | Using a unique dataset combining Colombian firm, bank, and credit registry data from 2006 to 2021, we investigate the relationship between bank productivity and the productivity of firms they lend to. We find a positive correlation that strengthened after 2017. We posit a theoretical model to rationalize this finding: more productive banks optimally choose to lend to more productive firms because they can better afford the fixed costs of accessing higher-quality firm profiles. |
| Keywords: | firm productivity; bank productivity; lending relationships; productivity measurement |
| JEL: | D24 E44 G21 |
| Date: | 2025–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021298 |
| By: | Diego A. Comin; Xavier Cirera; Marcio Cruz |
| Abstract: | This paper examines technology sophistication in establishments. To comprehensively measure technology sophistication, we create a grid that covers key business functions and the technologies used to conduct them. Analyzing data from over 21, 000 establishments in 15 countries, we find that the most widely used technology is usually not the most sophisticated available in the business function. There is significant variation in technology sophistication across and within countries, explaining 31% of productivity dispersion and over half of the agricultural productivity gap. The sophistication of widely used technologies is more relevant for productivity than the most advanced technologies. More sophisticated technologies are appropriate for both developed and developing countries. |
| JEL: | O1 O3 O4 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33358 |
| By: | MORIKAWA Masayuki |
| Abstract: | While it is generally agreed that reducing the gender wage gap is desirable, different policy measures would be effective in addressing the problem, depending on what causes the gap. This study measures the relationships between firms’ compositions of workers, productivity, and wages―the “productivity-wage gap†―using panel data from 2015 to 2021 constructed from an original survey of Japanese firms linked with the Basic Survey of Japanese Business Structure and Activities. These results indicate that, on average, female workers’ wages are not lower than their contributions to firm productivity. Second, we do not find female workers’ wages to be higher than productivity in firms with labor unions and female directors on their boards. Third, part-time workers’ wages are higher relative to their productivity levels. Fourth, the wages of highly educated workers are lower relative to their productivity levels. Fifth, when firm fixed effects are controlled for, the productivity-wage gap for female workers and highly educated workers cannot be precisely estimated, indicating that unobserved firm characteristics are behind the gap observed cross-sectionally. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25008 |
| By: | Loren Brandt; Johannes Van Biesebroeck; Luhang Wang; Yifan Zhang |
| Abstract: | China’s manufacturing sector has been a key source of the economy’s dynamism. Analysis after 2007 however is hampered by problems in the key data source for empirical analysis, the National Bureau of Statistics’ (NBS) annual survey of industrial firms. Issues include missing information on value added and intermediate inputs, and concerns of over-reporting. The annual survey of firms conducted by China’s State Taxation Administration (STA) provides a reliable, alternative source of firm-level data for years from 2007 to 2013. Since the sample is not representative and the precise sampling scheme is not known, the data cannot be used directly to draw inferences on China’s manufacturing sector. By comparing the joint distribution of key variables for which both surveys provide reasonably reliable information, we recover the sampling scheme of the STA survey and use it to simulate samples for 2007 to 2013 that are comparable to the NBS sample in earlier years. Our estimates reveal a marked slowdown in revenue-based total factor productivity growth that cuts across all industries, ownership types, and regions. The loss of dynamism in the private sector, and the reduced contribution of firm entry to aggregate productivity growth are especially prominent. |
| Date: | 2023–09 |
| URL: | https://d.repec.org/n?u=RePEc:ete:ceswps:746855 |
| By: | Quoc Tran-Nam (International University HCMC [Vietnam] - International University); Phu Nguyen-Van (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, IUH - Industrial University of Ho Chi Minh city); Tuyen Tiet (International University HCMC [Vietnam] - International University, BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| 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 |
| Date: | 2024–02–13 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04441426 |
| By: | Hasna Mrani Alaoui (UIT - Faculty of economics and management University Ibn Tofail of Kenitra, Morocco); Aziz Bensbahou (UIT - Faculty of economics and management University Ibn Tofail of Kenitra, Morocco) |
| Abstract: | Abstract The main objective of this contribution is to estimate empirically the long-run relationship and short-run dynamics between the level of TFP in Morocco and some factors that may affect it. We focus on human capital, participation in global value chains, the quality of institutions and the budget deficit. We use as an econometric tool an ARDL bound testing approach combined with the Toda-Yamamoto test to study causality. Our research shows that the effects of these variables vary between the short and long term. In the short term, the impact of human capital and institutions is negative, the variable participation in global value chains has no instantaneous effect on TFP growth and the variable that captures macroeconomic stability, i.e. public budget deficit has an insignificant negative impact. In the long term, the effects of human capital accumulation on TFP growth is positive. The quality of institutions has a positive impact on productivity. Differently with what we observed in the short-term, participation in global value chains has a negative impact on TFP. Analysis of the impulse response function yields the following results. A shock to human capital results in an immediate increase in TFP, while a shock to the PVC variable results in an immediate drop in TFP. The immediate response of TFP to an impulse from the two variables INS and DB is negative, but becomes positive from the second year onwards. Key words: Total factor productivity, Participation in value chains, Human capital, Morocco, ARDL bound testing. |
| Keywords: | Total factor productivity, Participation in value chains, Human capital, Morocco, ARDL bound testing., Total factor productivity Participation in value chains Human capital Morocco ARDL bound testing, ARDL bound testing |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04828266 |
| By: | Saioa Armendariz; Carlos de Resende; Alice Fan; Gianluigi Ferrucci; Bingjie Hu; Sadhna Naik; Can Ugur |
| Abstract: | This paper examines competitiveness and productivity in the Baltics. Focusing on recent developments, it asks why Russia’s war in Ukraine led to a prolonged recession and strong decline in competitiveness in Estonia, while Latvia and Lithuania shielded their economies more effectively. The paper starts by documenting a deterioration in export performance across the region. Using a constant share decomposition, it finds that, unlike in Latvia and Lithuania, Estonia’s declining export share has been mainly linked to a reduction in the ‘intensive margin’—a sign of weakening external competitiveness and declining relative productivity. Multivariate filtering techniques and estimates of the real effective exchange rates based on historical productivity trends, consistent with Balassa-Samuelson, confirm that differences in long-term total factor productivity growth have affected external competitiveness. While Estonia’s post-GFC slowdown in productivity growth and real exchange rate appreciation have eroded its competitive edge, Latvia and Lithuania have shown greater resilience, aided by more balanced real effective exchange rates and, for Lithuania, stronger corporate balance sheets. A micro-econometric analysis further reveals that resource misallocation, particularly in the services sector, has been a key driver of declining productivity in the region. These findings underscore the need for targeted reforms to improve allocative efficiency, boost productivity, and restore competitiveness in the Baltic region. |
| Keywords: | Export shares; Competitiveness; Productivity; Baltics |
| Date: | 2025–01–17 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/018 |
| By: | Halkos, George; Bampatsou, Christina; Aslanidis, Panagiotis-Stavros |
| Abstract: | This study examines the eco-efficiency performance of green energy transitions in 45 high-emission countries (1995–2022), focusing on convergence in policymaking. Using hybrid window data envelopment analysis (WDEA) models, eco-efficiency was evaluated for non-renewable energy (NRES), renewable energy (RES), and mixed sources. Inputs included capital, labor, and electricity generation; outputs were GDP (desirable) and CO2 and CH4 emissions (undesirable). Efficiency averaged 76.04% (RES), 74.25% (NRES), and 73.61% (mixed). Conditional convergence analysis revealed countries with similar conditions converge to unique steady states, highlighting the need for harmonized energy standards, therefore investments in green technologies can reduce emissions and electricity generation costs. |
| Keywords: | hybrid window DEA; club convergence; imergeclub; logtreg; Log t regression test; energy sectors. |
| JEL: | O13 Q42 Q48 Q50 Q54 |
| Date: | 2025–01–14 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123341 |
| By: | Niftiyev, Ibrahim; Ibadoghlu, Gubad |
| Abstract: | Understanding long-term agricultural productivity is essential for designing agricultural policies, planning and targeting other economic policies (e.g., industrial policy), and managing agricultural business models. In a developing and oil-rich country such as Azerbaijan, agriculture is among the limited opportunities to diversify oil-based value added and address broad welfare issues, as farmers and agricultural workers account for a large share of total employment and the labor force. However, previous studies have not focused on an empirical assessment of the long-term and subsectoral productivity of crop commodities. Rather, they have used a highly aggregated and short-run perspective, focusing mainly on the impact of the oil sector on agricultural sectors. Here, we applied principal component analysis and hierarchical cluster analysis to identify similarities and differences in the productivity of specific crop commodities (e.g., cotton, tea, grains, tobacco, hay, fruits, and vegetables) between 1950 and 2021. We show that some crops are similar in terms of their variation, growth rates, and transition from the Soviet era to the post-Soviet period. Although the dynamics of change are different for food and non-food crops and for high- and low-productive commodities, it is still possible to narrow down specific subsectors that could reach the same productivity levels. This helps map out the productivity levels of crop commodities over time and across different subsectors, allowing for better policy decisions and resource allocation in the agricultural sector. In addition, we argue about some outlier commodities and their backward status despite extensive government support. Our results provide a common basis for policymakers and businesses to focus specifically on productivity and profitability from an economic standpoint. |
| Keywords: | agriculture; agricultural economics; Azerbaijan economy; crops; hierarchical cluster analysis; principal components analysis; productivity |
| JEL: | R14 J01 N0 |
| Date: | 2023–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126934 |
| By: | Jérôme Faure (CEBC - Centre d'Études Biologiques de Chizé - UMR 7372 - ULR - La Rochelle Université - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Esther Devilliers (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | This article examines how integrating nature-based solutions into agricultural strategies can address the inefficient use of polluting technological solutions. A theoretical microeconomic model, based on subjective expected utility, is developed and empirically tested on rapeseed cultivation. The study highlights the overuse of polluting technological solutions and the underuse of nature-based solutions, driven by inaccurate perceptions of input productivity. The article provides recommendations for public policies aimed at correcting these perceptions and optimizing the use of inputs by balancing the cost-effectiveness of interventions for both nature-based and polluting technological solutions. The findings suggest that policies focused on correcting misperceptions about polluting technological solutions are more effective than those focused on nature-based solutions. |
| Keywords: | Input efficiency, Perception, Ecosystem service, Nature-based solutions, Subjective expected utility |
| Date: | 2023–08–29 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04869177 |
| By: | Mills, Stuart; Spencer, David A. |
| Abstract: | Organisations are increasingly using artificial intelligence (AI). Where AI performs productive tasks more efficiently than humans, organisations will benefit economically through increases in productivity. However, if AI is deployed to undertake unproductive, superfluous tasks, the efficiency benefits will be reduced, even if these tasks are performed more efficiently than a human could, because the said tasks are inefficient to begin with. We call this eventuality ‘efficient inefficiency.’ We outline several reasons why superfluous tasks are created by managers and why they persist in organisations, drawing on an array of behavioural, managerial, and sociological literature. We argue bounded rationality accounts for why managers often fail to identify superfluous tasks, coupled with organisational conflicts which often incentivise their creation. These factors impede the ability of organisations to avoid efficient inefficiency. Restructuring organisations to promote knowledge sharing and align stakeholder incentives may reduce, though not eliminate, the risk of efficient inefficiency. |
| Keywords: | artificial intelligence; bounded rationality; organisational efficiency; productivity; superfluous work |
| JEL: | J50 J1 |
| Date: | 2025–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126626 |