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on Efficiency and Productivity |
| By: | Yannick, Djoumessi Fosso; Bergaly, Kamdem Cyrille |
| Abstract: | Today, we are confronted with one of the greatest challenges of the 21st century: meeting the increasing needs of the population while reducing the damage caused by agriculture to the natural resources, namely water and land. To date, the empirical literature on the estimation of productivity in agriculture, has disregarded water as an input. Given that it constitutes a necessary input, then its efficient use becomes a prerequisite condition. The main objective of this study was to investigate productivity growth in agriculture in sub-Saharan Africa, considering water as an input. The Stochastic Frontier Approach (SFA) POLICY BRIEF Water Use and Agricultural Productivity Growth in sub Saharan Africa Djoumessi Fosso Yannick and Kamdem Cyrille Bergaly October 2023 / No.794 2 Policy Brief No.794 was used to estimate the agricultural production function incorporating water as an input and to derive the total factor productivity (TFP) using a sample of 19 countries for the period 19912014. The results of the SFA model showed that the classical coefficients of the production function, including water endowment as an input, have a significant and positive impact on agricultural production growth after correction for the potential endogeneity bias. The average growth rate of TFP considering water as an input was estimated at 0.045% per year for the full sample period, a figure considerably lower than classical TFP estimated at an average rate of 1% per year. For the period 19912001, the rate was negative and estimated at -0.44% and 0.36% for the period 20022012. The higher performance in 20022012 may be due to the significant adoption of good agricultural practices along with technological advances that allowed for saving water (between -0.08% and -0.05% on average per year). Therefore, it would be advisable to focus more on good practices in water saving which are key to an efficient use of water in agriculture |
| Date: | 2024–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:c12071df-613c-4012-bbc7-1ef3cb5874ba |
| By: | Kaitila, Ville |
| Abstract: | Abstract We analyse the development of labour productivity in five service industries in Europe, the United States, and Japan. Vis-à-vis a group of peer countries, labour productivity in service industries is relatively low in Finland. We further find that the respective gap in capital intensity (capital stock to hours worked) is even greater. Using the growth accounting framework and panel estimations, we find that in 1995–2023 overall capital intensity was positively associated with the level of labour productivity in European countries. This is also the case if the capital stock is disaggregated into four parts with ICT, R&D, software and database, and all other capital analysed separately. Furthermore, the annual change in overall capital intensity, or capital deepening, is positively associated with the change in labour productivity in service industries. The association is weaker when capital is disaggregated into parts, with the strongest association found for the traditional capital stock, while the results for ICT and IPP capital deepening depend on the service industry analysed. |
| Keywords: | Service industries, Productivity, Capital intensity, ICT, R&D, Software and databases |
| JEL: | C23 O14 O30 O47 |
| Date: | 2025–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:127 |
| By: | Gnimassou, Blaise |
| Abstract: | Contrary to popular belief, many Africans who migrate stays in Africa. In a context of low trade openness between African countries and high differences in the prices of goods and factors, intra-African immigration could theoretically play an important role. This paper aims to study the impact of intra-African immigration on labour productivity in Africa, as well as its macroeconomic and sectoral components. Empirically, I rely on a panel of 187 countries, including 53 African countries, over the period 19902019, and a gravity-based 2SLS approach to deal with endogeneity. The results show that intra-African immigration has a positive, significant, and robust impact on labour productivity in Africa. This impact is greater than the effect of immigration in a global sample, and essentially passes through the improvement in total factor productivity and capital efficiency. While immigration tends to deteriorate capital productivity in the world sample, intra-African immigration improves capital productivity in Africa. Furthermore, the results reveal that the service sector is the one that benefits from the positive effect of intra-African immigration in Africa. |
| Date: | 2024–04–11 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:24a28f5a-7524-4b33-96b5-918ed203dd92 |
| By: | Filippo Biondi (Düsseldorf Institute for Competition Economics); Sergio Inferrera (Queen Mary University of London, School of Economics and Finance); Matthias Mertens (Massachusetts Institute of Technology); Javier Miranda (Halle Institute for Economic Research (IWH), Friedrich-Schiller University, and CompNet) |
| Abstract: | We study changes in job reallocation in Europe after 2000 using novel micro-aggregated data that we collected for 19 European countries. In all countries, we document broad-based declines in job reallocation rates that concern most economic sectors and size classes. These declines are mainly driven by dynamics within sectors, size, and age classes rather than by compositional changes. Simultaneously, employment shares of young firms decline. Consistent with US evidence, firms’ employment has become less responsive to productivity shocks. However, the dispersion of firms’ productivity shocks has decreased too. To enhance our understanding of these patterns, we derive and apply a firm-level framework that relates changes in firms’ market power, labor market imperfections, and production technology to firms’ responsiveness and job reallocation. Using German firm-level data, we find that changes in markups and labor output elasticities, rather than adjustment costs, are key in rationalizing declining responsiveness. |
| Keywords: | Business dynamism, job reallocation, productivity, responsiveness of labor demand, market power, technology, European cross-country data |
| JEL: | D24 D43 J21 J23 J42 L11 L25 |
| Date: | 2025–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:jrp:jrpwrp:2025-0004 |
| By: | Alabi, Reuben Adeolu; Abu, Godwin Anjeinu |
| Abstract: | This study analyzes the impact of agricultural public expenditure on agricultural productivity in Nigeria. The relevant time series data for the study were obtained from secondary sources. The data ranged from 1981 to 2014. An instrumental variable two-stage least squares (IV-2SLS) econometric model was employed to investigate the endogeneity of public agricultural expenditure, and the autoregressive distributed lag (ARDL) econometric technique was used to determine the long and short-term effects of public agricultural expenditure on agricultural productivity. The study shows that 20% of agricultural public budgets POLICY BRIEF The Impact of Agricultural Public Expenditure on Agricultural Productivity in Nigeria Reuben Adeolu Alabi and Godwin Anjeinu Abu October 2023 / No.790 2 Policy Brief No.790 were not implemented in Nigeria. On average, agricultural public capital expenditure comprised 55% of total agricultural public expenditure in Nigeria, which is lower than the recommended 60% for effective agricultural sector performance. The study also reveals that while public agricultural capital expenditure and agricultural public total expenditure are strong determinants of agricultural productivity, agricultural public recurrent expenditure maintains a weak relationship with agricultural productivity in Nigeria. Finally, the study demonstrates that agricultural public spending on irrigation has the highest impact on agricultural productivity, while agricultural public spending on subsidies has the least impact on agricultural productivity. Among other recommendations, it is suggested that the agricultural public expenditure pattern should be realigned to favour investments in irrigation, research and development, and rural development, which currently attract lower budgetary allocations in Nigerian agricultural budgets. |
| Date: | 2024–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:dcdb5098-f21a-4050-98af-ec571e602382 |
| By: | Dimitris Korobilis (Adam Smith Business School, University of Glasgow, UK; BI Norwegian Business School, Norway; Rimini Centre for Economic Analysis); Emmanuel C. Mamatzakis (Birkbeck Business School, UK); Vasileios Pappas (Surrey Business School, UK) |
| Abstract: | This paper introduces a novel econometric framework for identifying and modeling bank business models (BBMs), which dynamically evolve in response to changing financial and economic conditions. Building on the stochastic frontier literature, we extend the traditional cost-efficiency models by decomposing inefficiency into persistent and transient components. We propose a Bayesian nonparametric approach that adapts to the data through an infinite mixture model with predictor-dependent clustering, enabling a flexible classification of banks into distinct business models. Our method, based on the Logit Stick-Breaking Process (LSBP), provides a data-driven way to capture the heterogeneity in bank strategies, allowing for dynamic transitions between business models over time. This model offers a significant advancement over existing parametric and kernel-based approaches by combining the scalability of nonparametric methods with efficient computational routines. We apply the model to a dataset of European banks and identify four distinct business model clusters, providing novel insights into the evolution of bank performance and efficiency. Our findings contribute to the growing literature on the identification and measurement of bank business models, offering valuable implications for policy and regulatory frameworks. |
| Keywords: | Stochastic Frontier Analysis, Bayesian Nonparametrics, Logit Stick-Breaking Process, Dynamic Clustering, Cost Efficiency |
| JEL: | C11 C14 C23 D24 G21 G28 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:rim:rimwps:25-03 |
| By: | Hung, Dang Ngoc |
| Abstract: | This paper investigates the impact of capital structure on business performance of Vietnamese enterprises during the Covid-19 pandemic. The study focuses on key performance indicators such as return on total assets (ROA), return on equity (ROE), and earnings per share (EPS). The analysis employs the table data regression method using a dataset comprising 5747 enterprise observations for the period of 2019 to 2022. The findings indicate that capital structure has a significant negative influence on the business performance of Vietnamese enterprises. Moreover, the study highlights the substantial effect of capital structure on business performance when considering different aspects and debt structures, particularly within the framework of the Covid-19 pandemic. Based on these research findings, the article recommends that business administrators carefully consider the optimal capital structure to enhance business efficiency, especially given the unpredictable nature of the Covid-19 pandemic |
| Date: | 2024–01–05 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:84dae_v1 |
| By: | Bakehe, Novice Patrick |
| Abstract: | This paper examines the effect of agricultural productivity on the environment, using deforestation as an example. We examined this relationship using a sample of nine countries in Central Africa, with data from the 1990s to 2020. The econometrics results show that an increase in agricultural productivity reduced the rate of deforestation in these countries. This suggests that policies that facilitate the adoption of modern inputs and investment in technology leading to an increase in yields from agriculture could lead to a reduction in the demand for agricultural land. |
| Date: | 2024–04–11 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:e7809a1e-ad9f-4db9-b223-9583ae4a8a56 |
| By: | Macharia, Kenneth Kigundu |
| Abstract: | While the service sector is increasingly playing a bigger role in the structural transformation of developing countries, the sectors level of technical efficiency remains understudied. This study analyses the level of technical efficiency in the service sector of selected sub-Saharan African countries and identifies covariates of this technical efficiency. Data are from the 2013 World Bank Enterprise survey for six countries, namely Kenya, Uganda, Tanzania, Ghana, Zambia and the Democratic Republic of the Congo. The estimation is performed by a two-stage bootstrap data envelopment analysis approach at the country and sub-sector levels. The sub-sectors of interest are retail, wholesale, hotel and restaurant, transport, motor vehicle services and IT. The findings show substantial opportunity to enhance technical efficiency in the selected sub-Saharan Africa service firms. The nature of the opportunity varies across countries and sub-sectors. Firm size, export, firm age, research and development, training, female firm ownership and top managers experience have an influence on technical efficiency but this influence varies across countries. In general, the findings imply that there is a need to provide an enabling environment that allows the growth of service firms given that large service firms are more technically efficient compared to small firms. |
| Date: | 2024–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:d1c3a5c1-5130-4274-bca7-bb81fb50d773 |
| By: | Kane, Aboubacry |
| Abstract: | The objective of this study was to profile innovative companies and to examine the link between innovation and productivity in manufacturing firms in Senegal. It took into account the interaction between various forms of innovation. Using a descriptive analysis of variance (ANOVA) approach and multivariate regression, the study found that although Senegal had a satisfactory level of technology adoption, an innovation deficit remained in the industrial sector, notably in research and development (R&D) activities. The study established that larger enterprises and firms that export their products are the most innovative. However, no significant relationship was found between the gender of the manager of the firm and the adoption of various forms of innovation. Furthermore, our results demonstrate that the choice to adopt innovation in an organization is positively related to improved labour productivity. In regard to the other types of innovation, no association was found. Our results suggest the need to develop strategies that integrate innovation in industrial policy in order to facilitate its adoption. They also suggest the need to undertake regular surveys of innovation in firms so as to better understand market trends, identify their strengths and weaknesses and facilitate decision making in terms of innovation. |
| Date: | 2024–05–13 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:6f9bd06e-8c2b-4c63-92ef-8becf43a1c38 |
| By: | World Bank |
| Keywords: | Public Sector Development Governance-Governance and the Financial Sector Poverty Reduction-Employment and Shared Growth Social Protections and Labor-Employment and Unemployment |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:41518 |
| By: | Bettina Bruggemann; Zachary L. Mahone; Thomas Palmer |
| Abstract: | Ownership changes are common across firms of all sizes, and they have meaningful impacts on firm performance. Using a panel of Canadian administrative data we document that sales are an important margin in the firm life cycle, larger than exit rates for employer firms. Applying an event-study framework, we find that (a) survival rates initially decline post sale, leveling off after three years and (b) conditional on survival, profits are permanently higher. Embedding ownership changes in a model of firm dynamics, we find that 4.5% of entrants survive due to the option value of sale and that, within ten years from birth, 13% of dispersion in firm size is attributable to realized ownership changes. Moreover, ownership changes are particularly important for high productivity firms, accounting for one quarter of revenue concentration among the top 1% of businesses. |
| Keywords: | Firm Dynamics; Ownership Changes; Firm Concentration |
| JEL: | E0 L25 D22 M13 G30 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:mcm:deptwp:2025-03 |
| By: | Muhoza, Benjamin Kanze; Majune, Socrates Kraido |
| Abstract: | This study analyses the effect of political instability on firm performance in the Democratic Republic of Congo (DRC), one of the most unstable countries in sub-Saharan Africa. We use pooled panel data for three waves of the World Bank Enterprise Survey of the DRC (2006, 2010, and 2013) to analyse the effect of political instability on five measures of performance: employee growth, sales growth, productivity, investment, and export status. Results from the endogenous switching model reveal that political instability adversely affects firm performance in the DRC. In the presence of political instability, employee POLICY BRIEF Political Instability and Firm Performance in the Democratic Republic of Congo Benjamin Kanze Muhoza and Socrates Kraido Majune October 2023 / No.786 2 Policy Brief No.786 growth, sales growth, productivity, and investment growth significantly decline. Conversely, firms that do not experience political instability grow in terms of employee growth, sales growth, productivity, investment, and exporting activities. Our results are robust when we proxy political instability with losses due to theft, robbery, and vandalism. For purposes of policy, we recommend that political stability should be enhanced through political goodwill and legislation that advocates for peace. Firms can also push for this agenda through their business associations and platforms such as public-private partnerships that link them to the government. |
| Date: | 2024–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:a38292f3-622c-4e63-8076-14dc81a21bf4 |
| By: | Okumu, Ibrahim Mike; Nathan, Sunday; Bbaale, Edward |
| Abstract: | This paper examines the moderating role of the business environment in the relationship between the gender of the top manager and firm performance (measured as sales per employee), and whether female-managed firms perform better the higher the proportion of female employees in the firm. The paper uses World Bank Enterprise Survey data of 14, 561 firms from 29 African countries collected between 2010 and 2016. The descriptive analysis reveals significant variation in the performance and experience of business environment constraints that disadvantage female-managed firms. Controlling for potential endogeneity POLICY BRIEF Gender and Firm Performance in Africa: Does the Business Environment Play a Moderating Role? Ibrahim Mike Okumu, Sunday Nathan and Edward Bbaale October 2023 / No.799 2 Policy Brief No.799 and country fixed effects, we show that female-managed firms are associated with lower performance compared to male-managed firms. Electricity outages, informal competition, and corruption account for the performance gap between female and male-managed firms. However, we show that large female-managed firms perform better than male-managed large firms. Overall, the results imply that strengthening Africas business environment is central to closing the performance gap between male and female managers. |
| Date: | 2024–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:0c596f70-cbbc-4b74-8c87-0fe515852400 |
| By: | Ayele, Yohannes; Edjigu, Habtamu; Oostendorp, Remco H. |
| Abstract: | This paper examines the impact of civil conflict on the functioning and accessibility of markets for production inputs and their allocation among manufacturing establishments using the 2014-2018 annual census of Ethiopian manufacturing firms. We exploit the time and spatial variation in conflict intensity at the district (Woreda) level and compare whether production input choices of Ethiopian large and medium manufacturing firms in the same sector differ across districts experiencing differential changes in conflict intensity. We find that conflict-induced distortion results in manufacturing firms substituting domestically produced for imported inputs. As a result, firms in high-conflict districts use a relatively lower value of foreign-produced materials and a relatively higher value of domestically produced ones in production. These distortions are likely among the microeconomic mechanisms through which conflict affects aggregate economic outcomes. Furthermore, we find that conflict intensity induces manufacturing firms to substitute non-production workers (skilled workers) with production workers (unskilled workers). Finally, we estimate the impact of conflict induced input distortions on the output value of manufacturing firms and find that this distortion can account for about 40% of the fall in output value of firms in high-conflict districts. |
| Date: | 2024–04–11 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:44e83c84-b6a2-4acc-9e9b-5c0f4eeedc7c |