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on Efficiency and Productivity |
| By: | Tommaso Agasisti (Politecnico di Milano School of Management); Pietro Massaggia; Teo Miserocchi |
| Abstract: | This paper investigates the relationship between local government efficiency and Quality of Life (QoL) across Italian Provinces with 2019 as reference year. The study aims to assess whether local governments (municipalities within a certain province) that achieve higher technical efficiency in delivering public services also present a higher QoL for citizens. The method developed to address the research question employs bootstrapped Data Envelopment Analysis (DEA) to generate efficiency (first-stage) and QoL scores (second-stage), followed by a third-stage regression to examine the relationship between these two dimensions, also considering contextual factors. The analysis reveals significant regional disparities, with Northern Italian provinces generally displaying higher QoL outcomes compared to their Southern counterparts. We propose an innovative specification less dependent on municipal spending to measure efficiency. The results suggest that higher technical efficiency does not always translate equally into higher QoL, as this relationship might also depends on the wealth level of the areas analyzed or by the action of other government levels. Specifically, municipalities’ efficiency appears to be more relevant in less prosperous regions. The analysis is conducted both for global efficiency and for single services separately. |
| Keywords: | Quality of Life, Technical Efficiency, Local Government, Municipalities, Public Services, Data Envelopment Analysis. |
| JEL: | H72 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ipu:wpaper:120 |
| By: | Florian Misch; Ben Park; Carlo Pizzinelli; Galen Sher |
| Abstract: | The discussion on Artificial Intelligence (AI) often centers around its impact on productivity, but macroeconomic evidence for Europe remains scarce. Using the Acemoglu (2024) approach we simulate the medium-term impact of AI adoption on total factor productivity for 31 European countries. We compile many scenarios by pooling evidence on which tasks will be automatable in the near term, using reduced-form regressions to predict AI adoption across Europe, and considering relevant regulation that restricts AI use heterogeneously across tasks, occupations and sectors. We find that the medium-term productivity gains for Europe as a whole are likely to be modest, at around 1 percent cumulatively over five years. While economcially still moderate, these gains are still larger than estimates by Acemoglu (2024) for the US. They vary widely across scenarios and countries and are sustantially larger in countries with higher incomes. Furthermore, we show that national and EU regulations around occupation-level requirements, AI safety, and data privacy combined could reduce Europe’s productivity gains by over 30 percent if AI exposure were 50 percent lower in tasks, occupations and sectors affected by regulation. |
| Keywords: | Artificial Intelligence; Productivity; Technology; Regulation |
| Date: | 2025–04–04 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/067 |
| By: | Wang, Jian-xiu; Hou, Dan-dan; Zhong, Shun-chang; You, Yun-tian |
| Abstract: | Research conducted worldwide has established that industrial agglomeration can improve firm productivity, regardless of policy and institutional factors. In this study, we utilize firm-level data from the Chinese Industrial Enterprises Database (CIED) for the period of 1998-2014 to analyze the relationship between induced-agglomeration policy and the productivity of firms operating within industrial parks while considering productivity and regional heterogeneities. To ensure the reliability of our results, we adopt various identification strategies that produce consistent outcomes. Additionally, we examine the impact of induced-agglomeration policy on firm survival in industrial parks by utilizing a Cloglog survival model. Our findings indicate that induced-agglomeration policy has a negative effect on the productivity of firms operating within industrial parks, with the negative effects diminishing as TFP increases and being stronger in less developed areas. We also find that induced-agglomeration policy can effectively enhance the lifespan of firms, particularly in less developed regions. We then point out policy optimization and other future research topics. |
| Keywords: | Keywords induced-agglomeration policy·productivity·survival·China |
| JEL: | C0 O25 O4 O40 |
| Date: | 2025–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124377 |
| By: | Kalina Manova; Andreas Moxnes; Oscar Perelló; Kalina B. Manova |
| Abstract: | This paper examines intermediation in production networks to unpack the firm attributes and matching costs that govern firm-to-firm networks and the gains from trade. Exploiting rich customs data for Chile, we show that exporters of all sizes use intermediaries, mix trade modes across buyers, and set lower prices on intermediated flows. We rationalize these facts in a model of network formation with suppliers of heterogeneous productivity and matchability, buyers of heterogeneous productivity, and intermediaries that reduce matching costs for a brokerage fee. Empirical evidence on trade activity across firms and countries corroborates the model, and informs how geographic distance, logistics and customs efficiency, formal institutions, and cultural-linguistic similarity shape network costs. Model estimation reveals that sellers’ attributes are negatively correlated, such that intermediaries enable highly productive sellers with low matchability to reach smaller buyers. This amplifies the welfare gains from intermediation due to wider and deeper network connectivity. |
| Keywords: | production networks, intermediation, productivity, matching costs |
| JEL: | F10 F12 F14 F23 L11 L14 L81 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11717 |
| By: | Mrs. Swarnali A Hannan; Samuel Pienknagura |
| Abstract: | The Brazilian labor market went through significant changes in 2017 with reforms to reduce litigation and increase flexibility in employment contracts. Using firm-level data, we exploit the variation in litigation cases across Brazilian states to estimate the impact of the 2017 labor reforms on productivity. The results suggest a significant boost in total factor productivity (TFP) for labor- and trade-intensive firms from the decline in litigation costs. High labor intensive firms witnessed an increase in TFP of about 15 percent after the reform compared to low labor-intensive firms. Similar magnitudes are found for trade-internsive firms. There is also some suggestive evidence that the productivity-enhancing effects of the reforms are especially pronounced for small firms. |
| Keywords: | Labor market reforms; litigation cases; total factor productivity |
| Date: | 2025–04–04 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/063 |
| By: | Xipeng Gao (School of Economics and Finance, XiÕan Jiaotong University, XiÕan, Shaanxi, PR China); Xiangju Li (School of Economics and Finance, XiÕan Jiaotong University, XiÕan, Shaanxi, PR China); Jorge Martinez-Vazquez (International Center for Public Policy, Georgia State University, Atlanta, Georgia, United States) |
| Abstract: | A central tenet in the fiscal federalism literature posits that inter-jurisdictional tax competition can engender economic efficiency losses. However, diverse firms exhibit heterogeneous sensitivities to varying tax burdens. When firms strategically evaluate differential tax pressures across tax categories, tax competition evolves into competition over tax structure. This dynamic is particularly pronounced in the case of green taxes and fees, which aim to internalize negative externalities compared to conventional tax instruments. We identify a Òrace to the bottomÓ phenomenon in corporate green taxes and fees driven by structural distortions within the tax system in China. Based on the constructed theoretical model of energy factor allocation that includes a distortionary coefficient of green taxes and fees, we predict that the efficiency growth of firms will decrease as the intensity of their Òrace to the bottomÓ competition increases in response to the relative pressure of green taxes and fees. Using data from listed companies in China, we find a robust negative relation between the Òrace to the bottomÓ competitive intensity of green taxes and fees pressure and total factor productivity growth. Our findings indicate that increasing the intensity of fiscal and environmental decentralization exacerbates the problem of the intensity of competition in the corporate tax structure, generating significant efficiency losses. These findings provide new evidence on the economic disadvantages of unchecked tax competition in decentralized systems. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ays:ispwps:paper2507 |
| By: | Czarnitzki Dirk; Confraria Hugo (European Commission - JRC) |
| Abstract: | It has been a long-standing debate whether Europe suffers from an innovation gap. Recent studies indicate a global decline in research and development (R&D) productivity across various sectors, raising concerns about the efficiency of innovation investments. New panel data from the EU Industrial R&D Investment Scoreboard allow examining long-term relationships between firm productivity and R&D. The results show that EU top R&D investors struggle more than their global counterparts to convert their R&D into new ideas and marketable products. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc141091 |
| By: | Jun Cui |
| Abstract: | This study investigates the relationship between corporate digital innovation and Environmental, Social, and Governance (ESG) performance, with a specific focus on the mediating role of Generative artificial intelligence technology adoption. Using a comprehensive panel dataset of 8, 000 observations from the CMARS and WIND database spanning from 2015 to 2023, we employ multiple econometric techniques to examine this relationship. Our findings reveal that digital innovation significantly enhances corporate ESG performance, with GAI technology adoption serving as a crucial mediating mechanism. Specifically, digital innovation positively influences GAI technology adoption, which subsequently improves ESG performance. Furthermore, our heterogeneity analysis indicates that this relationship varies across firm size, industry type, and ownership structure. Finally, our results remain robust after addressing potential endogeneity concerns through instrumental variable estimation, propensity score matching, and differenc in differences approaches. This research contributes to the growing literature on technologydriven sustainability transformations and offers practical implications for corporate strategy and policy development in promoting sustainable business practices through technological advancement. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.01041 |
| By: | Olga Chiappinelli; Ambrogio Dalò; Leonardo M. Giuffrida; Vitezslav Titl |
| Abstract: | Governments support the green transition through green public procurement. Using US data, this paper provides the first empirical analysis of the causal effects of green contracts on corporate greenhouse gas emissions and economic performance. We focus on an affirmative program for sustainable products, which represents one-sixth of the total federal procurement budget, and publicly traded firms, which account for one-third of total US emissions. Our results show that securing green contracts reduces emissions relative to firm size and increases productivity. We find no evidence that the program selects greener firms, nor that green public procurement sales crowd out private sales. |
| Keywords: | public procurement, environmental policy, firm performance, greenhouse gas emissions, R&D, recycled materials, staggered difference-in-difference |
| JEL: | D22 D44 H32 H57 Q53 Q54 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11696 |