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on Efficiency and Productivity |
| By: | Fazekas, Mihaly; Poltoratskaya, Viktoriia; Marc Tobias Schiffbauer; Tóth, Bence |
| Abstract: | This paper assesses the impact of favoritism in public procurement on private sector productivity growth. To this end, it combines three novel microeconomic data sets: administrative data on firms, including more than 4 million firm-year observations and rich financial and ownership information; public procurement transaction data for 150, 000 published contracts and their tenders; and a newly assembled data set on firms’ political connections, drawing on asset declarations, sanction lists, and offshore leaks. This comprehensive data set allows tracing the impact of favoritism in allocating government contracts to economic growth. The findings show that politically connected firms are 18 to 32 percent more likely to win public procurement contracts due to their preferential access to uncompetitive tenders. Public procurement results in higher subsequent productivity and employment growth only if it has been awarded through competitive tenders. Firms winning contracts through uncompetitive procedures have flat growth but higher profit margins. Consistent with these findings, the paper shows that firms that are awarded uncompetitive public procurement contracts obtain rents of 9 to 11 percent from overpaid contracts. The results suggest that aggregate annual total factor productivity growth would have been 8 percent higher in the absence of favoritism in public procurement. |
| Date: | 2025–03–13 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11085 |
| By: | Daniel Fehrle (Kiel University, Department of Economics); Vasilij Konysev (University of Augsburg, Department of Economics) |
| Abstract: | The comparative economic performance between the former socialist German Democratic Republic (GDR) and the capitalist Federal Republic of Germany (FRG) remains inconclusive due to valuation problems. We address these problems by applying wedge-growth accounting to a newly compiled dataset. More precisely, we compare the allocation efficiency using wedges between marginal utility and productivity, as well as Total Factor Productivity (TFP) growth. Wedges in marginal utility account for binding quantity constraints in GDR’s goods and FRG’s labor market. We analyze the resulting unitless wedges and swap them in an equivalent growth model for the two Germanies to quantify their impact on output and economic welfare. The analysis reveals that the consequences of GDR’s rationing were multiple times more drastic than FRG’s unemployment. An observed faster output growth in the GDR stems from excessive labor input—depressing consumption-based welfare by a fourth—rather than from physical capital or TFP. Instead, GDR’s economic activity fell comparatively ten years further behind due to lower TFP growth. Lastly, persistent, substantial net inflows increase GDR’s welfare by 25 %. |
| Keywords: | Wedge-growth accounting, central planner allocation, quantity constraints |
| JEL: | E13 N14 O11 O47 P51 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:aug:augsbe:347 |
| By: | Rajveer Jat (University of California, Riverside, USA); Bharat Ramaswami (Ashoka University) |
| Abstract: | The literature has debated whether the productivity gap between agriculture and non-agriculture reflects mobility barriers or selection. Non-agriculture is not a homogenous category. In developing countries, most of non-agricultural employment is informal. Could it be that the productivity gap is driven by formal sector firms that are numerically small but economically substantial? This paper compares the productivity of agriculture to the informal and formal non-farm sectors in India. The comparison controls for sectoral differences in hours worked, human capital and labor share of value added. The paper finds substantial productivity gaps with the formal sector but small and negligible gaps with the informal non-farm sector. Between 40-50% of non-farm workers are in sectors not more productive than agriculture. These findings suggest that the primary dualism in development is between the formal non-farm sector and the informal sector including agriculture. |
| Date: | 2024–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:ash:wpaper:130 |
| By: | Andrea Chiavari; Sampreet Singh Goraya |
| Abstract: | We document a technological change in production technology biased towards intangible capital, such as computerized information and software, over other inputs in the last three decades. This has led to higher investment adjustment costs for firms. A general equilibrium firm dynamics model suggests that this can result in (i) increased firm size and concentration, (ii) changes in aggregate factor shares, and (iii) rise in dispersion of total factor productivity revenue coupled with declining aggregate productivity. This paper provides an alternative mechanism behind these macroeconomic changes in the US economy, emphasizing the efficient response of firms to changes in production technology. |
| Date: | 2025–04–08 |
| URL: | https://d.repec.org/n?u=RePEc:oxf:wpaper:1078 |
| By: | Alexander Bick; Adam Blandin; David Deming |
| Abstract: | Workers using generative AI reported they saved 5.4% of their work hours in the previous week, which suggests a 1.1% increase in productivity for the entire workforce. |
| Keywords: | generative artificial intelligence (AI); productivity |
| Date: | 2025–02–27 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:99631 |
| By: | World Bank |
| Keywords: | Energy-Energy Conservation & Efficiency Energy-Energy Consumption Energy-Energy Policies & Economics |
| Date: | 2023–08 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:40239 |
| By: | Aranya Chakraborty (Ahmedabad University); Digvijay Singh Negi (Ashoka University); Rahul Rao (Ahmedabad University) |
| Abstract: | Does information and communication technology (ICT) based provision of agricultural extension services help improve agricultural productivity in poor or developing countries? We answer this question in the case of rice production in rural Bangladesh. We exploit the spatiotemporal variation in the availability of village-level phone services and the temporal variation in the timing of an ICT-based intervention to identify the differential impact by input use, network centrality, and geographic proximity. We observe that, in the villages with access to phone service, there is a 50 percent reduction in plot-level inefficiency after the intervention, driven by plots that used rainfed water for cultivation. We provide evidence suggesting that these effects are due to increased input use by the farmers using rainfed farming. Our results also document that the intervention benefits geographically remote farmers differentially more, whose information needs are otherwise unfulfilled by traditional extension services. However, the diffusion of information via networks remains relevant as we document significant cross-community spill overs through geographic ties. |
| Keywords: | agriculture; Extension; ICT; Inefficiency; networks |
| Date: | 2024–09–14 |
| URL: | https://d.repec.org/n?u=RePEc:ash:wpaper:125 |