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on Efficiency and Productivity |
| By: | Herberto Rodríguez (Center for Economic Intelligence and Research, UPAEP México, Mexico); Víctor Giménez (Department of Business, Universitat Autònoma de Barcelona, Spain; IEI and Department of Economics, Universitat Jaume I, Castellón, Spain); Emili Tortosa-Ausina (IVIE, Valencia and IIDL and Department of Economics, Universitat Jaume I, Castellón, Spain); Javier Ordoñez |
| Abstract: | This study analyzes the efficiency and productivity of Mexican state universities from 1989 to 2017, a period marked by significant reforms in higher education funding mechanisms. Using a methodological approach that combines direct and indirect (budget-constrained) sequential technology frontiers, we construct a Malmquist productivity index that decomposes efficiency into four components: direct technical efficiency change, direct scale efficiency, input allocative efficiency, and indirect frontier shift. This quadripartite decomposition allows us to calculate the GAIN function, measuring the additional efficiency that universities could achieve through better resource allocation within existing budget constraints. Our analysis of 34 public state universities reveals considerable heterogeneity in efficiency patterns, with productivity improvements primarily driven by technological advancement (frontier shifts) rather than better resource allocation. By 2017, universities could potentially improve their efficiency by 52% through optimized resource allocation alone, without requiring additional funding. Cluster analysis identifies distinct strategic groups among universities, with varying efficiency profiles and improvement opportunities. Our findings suggest that while Subject to Performance Budget (STP) programs introduced in the 1990s contributed to overall efficiency improvements, they have not necessarily led to better resource allocation decisions, as evidenced by increasing bureaucratization and staff-to-faculty ratios. These results have important implications for higher education funding policies in developing economies, suggesting that significant performance improvements could be achieved through better allocation decisions even within existing budgetary constraints. |
| Keywords: | Higher Education, Efficiency, GAIN Function, Mexico |
| JEL: | I21 H52 C14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:jau:wpaper:2025/04 |
| By: | Kuusi, Tero; Lähdemäki, Sakari |
| Abstract: | Abstract We examine value chain productivity within the EU15 from 1995 to 2017; a period marked by growth and its subsequent slowdown following the 2008 Financial Crisis. Using data on global value chains from the new OECD Inter-Country Input-Output Tables and KLEMS data, we construct a measure of total factor productivity (TFP) of value chains, indexed by their final producer industry. Our findings indicate that the post-crisis slowdown in productivity growth within the EU15 is attributable to both weakened TFP growth in final producer industries and slightly negative TFP growth in the rest of the value chain. Using dynamic panel estimation, we demonstrate that the spillover effects of business-related intangibles on VC TFP growth were a significant contributor to growth before the crisis, whereas the returns to tangible investments have been weak. In addition, we perform an event study analysis of globalization shocks by examining the impact of bilateral investment agreements with China. Following the implementation of the agreement, we observe a positive impact on TFP. This improvement is accompanied by an increase in business-related intangibles within the final industry of the value chain, along with modest growth in tangibles. These findings suggest a positive productivity impact of globalization, and underscore the significant role of business-related intangibles over tangibles. |
| Keywords: | Global value chains, Intangibles, Productivity, Globalization |
| JEL: | F60 O47 L16 O14 E22 |
| Date: | 2025–05–26 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:128 |
| By: | Blees, Philip |
| Abstract: | Scrutinizing post-Keynesian theory of endogenous technical progress and Régulation Theory, this paper examines productivity growth and its variation within capitalist economies. The aim is to identify how institutions steer productivity growth. Based on the vast literature demonstrating that institutions not only have a direct impact on the innovative environment but also affect productivity growth by changing distribution and demand, an analytical framework that distinguishes between these direct and indirect effects is derived. Applying this method to Germany and the US from 1991 to 2022, we find that Germany was characterized by a laborled productivity regime, while the US exhibited a state-led productivity regime. This finding explains the more substantial decline in productivity growth in Germany - which was due to changes in the wage-labor nexus -, as compared to the US, where public investment stabilized productivity growth. |
| Keywords: | Endogenous technical progress, growth regimes, institutions, Kaleckian models, Régulation Theory, Germany, US |
| JEL: | E11 O43 O47 P52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:319063 |
| By: | Daniel Teeter |
| Abstract: | I estimate the effects of two Canadian internal trade liberalizations on plant-level productivity, markups, and exports. In particular, I examine the New West Partnership and Trade Agreement (NWPTA) and the Trade and Cooperation Agreement (TCA), both of which sought to reduce or remove prohibitive, technical and administrative barriers to trade across provinces. Employing a control function approach, I use Canadian manufacturing data to estimate plant-level total factor productivity and markups for 2004-2012. Then, using difference-in-differences methods, I find that the NWPTA increased the likelihood that a plant exports interprovincially, increased the share of output that plants sell to other provinces, increased plant-level total factor productivity but had no significant impact on plant-level markups. The agreement raised the average plant's productivity by 1.97 percent across all post-treatment years. In contrast, the TCA had no significant impact on plant-level productivity or export behavior, but was associated with a a small increase in markups. The NWPTA has shown significant positive effects on plant performance compared to the TCA, which has significant implications for the design of internal trade agreements. Specifically, the NWPTA's negative-list approach, in contrast to the TCA's positive-list, resulted in broader coverage. Moreover, the NWPTA achieved greater progress in mutually recognizing worker certifications and business registration, as well as in harmonizing business standards between provinces, making it a more effective agreement overall. |
| Keywords: | Inter-regional trade barriers, Trade agreements, Productivity, Markups, Canada |
| JEL: | F13 F14 L11 L38 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:qed:wpaper:1522 |
| By: | Râlea, Ioana-Alexandra; Pintilescu, Carmen |
| Abstract: | High quality and efficient education are fundamental to a country's development. As a result, the continuous assessment of the quality and efficiency of education remains a subject of constant debate. This has led to an increased interest in developing evaluation methods that are as reliable as possible. In this paper, we assess the quality and efficiency of higher education by constructing composite quality and efficiency indices, using various statistical methods for European Union's countries for the year 2022. For the construction of the composite quality index, we considered nine variables, then we used principal component analysis (PCA) to determine the importance of each variable, whereas the weighting method was applied in order to extract the factor loading coefficients of the score matrix. To construct the composite efficiency index, eight variables were analysed and we applied stochastic frontier analysis (SFA), which estimated a production frontier and measured the random inefficiency of production units. Inefficiency scores were obtained for each country and were combined with the outputs considered in the analysis to provide an overview of the efficiency of decision-making units (DMUs). These results were then correlated with the number of universities included in the international top rankings using the Spearman coefficient. Our findings reveal a positive correlation between the two composite indices and the number of universities featured in these rankings for each country analysed. This confirms that the analysed variables provide insight into the quality and efficiency of higher education system in these countries, which could increase the number of universities included in the international rankings. |
| Keywords: | quality, efficiency, higher education, PCA, SFA, composite index |
| JEL: | B23 C43 I21 I23 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124880 |
| By: | Giovanni Cerulli; Francesca Micocci; Armando Rungi |
| Abstract: | This paper investigates the causal effect of export intensity on productivity and other firm-level outcomes with a dose-response function. After positing that export intensity acts as a continuous treatment, we investigate counterfactual productivity levels in a quasi-experimental setting. For our purpose, we exploit a control group of non-temporary exporters that have already sustained the fixed costs of reaching foreign markets, thus controlling for self-selection into exporting. Our findings reveal a non-linear relationship between export intensity and productivity, with small albeit statistically significant benefits ranging from 0.1% to 0.6% per year only after exports reach 60% of total revenues. After we look at sales, variable costs, capital intensity, and the propensity to filing patents, we show that, before the 60% threshold, economies of scale and capital adjustment offset each other and induce, on average, a minimal albeit statistically significant loss in productivity of about 0.01% per year. Crucially, we find that heterogeneous export intensity is associated with the firm's position on the technological frontier, as the propensity to file a patent increases when export intensity ranges in 8%-60% with a peak at 40%. The latest finding further highlights that learning-by-exporting is linked to the building of absorptive capacity. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.03328 |
| By: | Wadho, Waqar; Chaudhry, Azam |
| Abstract: | We estimate the impact of international standards certification on the export performance of firms in a developing economy using a unique panel data from Pakistan's textile and apparel sector. To address endogeneity, we implement a novel instrumental variable strategy that leverages the prevalence of certified non-rival firms within the same district as an exogenous source of variation in certification adoption. We find that certification significantly increases the likelihood of exporting by 44 percentage points, raises export volumes by nearly ten times, and boosts annual export growth by 68 percent. We, then, explore the underlying mechanisms and find that certification facilitates product diversification, enhances knowledge networks, promotes both product and process innovation, and yields significant gains in labor productivity. However, certification does not lead to greater product complexity, suggesting that while it results in horizontal expansion and strengthens external linkages, it is not sufficient for vertical upgrading. |
| Keywords: | ISO, standards certification, export, technological innovation, productivity |
| JEL: | L14 L15 F14 M21 O31 J24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1611 |
| By: | Diego A. Comin; Danial Lashkari; Martí Mestieri |
| Abstract: | We document the structural transformation of innovation using historical patent data since the 1850s, along with R&D expenditure and TFP growth for the post-war period. Over time, innovation has shifted from agricultural sectors to manufacturing, and, more recently, to services. We develop and quantify a multi-sector semi-endogenous growth model of structural change in innovation and production, incorporating the classical demand-pull and technology-push drivers of innovation. Sectors differ in their innovation technologies, and the extent to which they benefit from knowledge spillovers (technology-push). Nonhomothetic demand shifts the market shares toward income-elastic sectors along the growth process (demand-pull). A calibrated version of our model replicates the structural transformations of innovation and production observed in the US data. Using the model, we evaluate the future impact of Baumol’s disease on aggregate productivity and find it to be minimal. Our results suggest that aggregate productivity growth may recover in the coming decades as the service sector becomes increasingly innovation-driven. |
| JEL: | E02 O1 O4 O5 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33855 |
| By: | Alex Chernoff (Bank of Canada); Allen Head (Queen's University); Beverly Lapham |
| Abstract: | We develop and estimate a search model in which identical consumers trade with price-setting firms that differ in productivity. In the model, equilibrium distributions of both prices and markups are non-degenerate and continuous with a firm's price decreasing in its productivity. Variation in the markup across firms is more complicated and depends on both the search process and the distribution of productivity. The model parameters governing each of these are estimated using firm-level data on retail industries in Canada. We use the estimated model to characterize the qualitative and quantitative differences in prices and markups across firms. These differences stem from firm-level variation in demand elasticities driven by productivity heterogeneity and imperfect information about prices. Additionally, we derive analytical expressionsto determine how individual firm prices and markups respond to cost and demand changes. This allows us to analyze empirically heterogeneity in firm-level price and markup pass-through. Our findings reveal substantial heterogeneity in pass-through across firms, highlighting the distributional impact of shocks across consumers purchasing in different regions of the price distribution. Finally, our analysis underscores the importance of accounting for individual firm price and markup adjustments to fully understand pass-through to average prices. |
| Keywords: | Markups, Productivity, Firm Heterogeneity, Search, Pass-through |
| JEL: | J11 D43 E31 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:qed:wpaper:1523 |
| By: | Pierre-Loup Beauregard; Thomas Lemieux; Derek Messacar; Raffaele Saggio |
| Abstract: | We use Canadian matched employer-employee data to assess the sources of the union pay premium. After controlling for worker heterogeneity using the Abowd, Kramarz, and Margolis (1999) (AKM) two-way fixed effects approach, we find that unionized firms pay about 15 log points more than non-unionized firms. Forty percent of this gap is linked to productivity differences between unionized and non-unionized firms as measured by value added per worker. The remaining gap reflects unions’ ability to extract more rents for workers. Our estimates imply that unions raise pay among unionized workers by around 9 log points. The union effect grows to about 11 log points in an extension of the AKM approach where unions also affect the returns to unobservable worker characteristics. |
| JEL: | J3 J50 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33740 |
| By: | Bachmann, Federico; Kataishi, Rodrigo |
| Abstract: | This study conducts a comprehensive meta-regression analysis to examine the relationship between firm size and innovative performance, utilizing 95 empirical studies published between 1993 and 2017. By incorporating 655 econometric estimations from these studies, we aim to identify key factors contributing to the heterogeneity observed in the empirical literature. Our findings confirm a positive average effect of firm size on innovative performance, reinforcing the theoretical expectation that larger firms tend to be more innovative due to economies of scale and greater resource availability. However, this relationship is moderated by various contextual and methodological factors that affect results, such as the measures used for firm size and innovation, the type of innovation considered (product or process), and the geographic context (developed or developing countries). This study contributes to the literature by presenting one of the most comprehensive meta-analyses on this topic to date, introducing new moderator variables, and offering deeper insights into the sources of heterogeneity. The results not only reinforce the most common hypotheses on the size-innovation relationship but also provide a nuanced understanding of the variations in empirical results. By highlighting the importance of measurement choices and firm characteristics in understanding the firm size-innovation nexus, this study offers valuable guidance for future research, enabling a more refined approach to investigating this complex relationship. |
| Keywords: | Tamaño de la Empresa; Innovación; Análisis de Regresión; Investigación y Desarrollo; 1993-2017; |
| Date: | 2025–05–09 |
| URL: | https://d.repec.org/n?u=RePEc:nmp:nuland:4327 |