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on Efficiency and Productivity |
| By: | António Afonso; José Alves; Najat Bazah; A. J. Sánchez-Fuentes |
| Abstract: | We evaluate the efficiency of public expenditure in the 27 European countries in achieving the Sustainable Development Goals (SDGs) of the 2030 Agenda. Using Data Envelopment Analysis (DEA), we map performance over the period 1995-2023, incorporating Musgravian functional spending – redistribution, allocation, public services, and private activities – as input variables, and constructing synthetic indices for the five pillars of the 2030 Agenda –people, planet, prosperity, peace, and partnership – as outputs. Results indicate that input efficiency scores range from 0.77 to 0.95, while output scores range from 0.88 to 0.93, suggesting a potential 5%-23.5% increase in inputs or a 7%-11.7% improvement in outputs. Denmark, Ireland, and Finland are efficient throughout the entire period, with strategic reductions in public spending correlating with high SDG performance. Sweden also has high efficiency and leads in multiple pillars by 2023. Conversely, the peace pillar remains the least achieved, while the people pillar shows the greatest progress. |
| Keywords: | public spending, sustainable development goals (SDGs), data envelopment analysis (DEA), government spending efficiency |
| JEL: | C61 H11 H72 O57 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12036 |
| By: | Uwe Jirjahn; Jens Mohrenweiser |
| Abstract: | Since the emergence of personnel economics, economists have been increasingly aware that the management practices used by firms are an important determinant of productivity. However, it is an open question of whether the impact of management practices on the productivity of firms depends on workplace health promotion activities (alternatively called workplace wellness programs). Using a widely recognized management index developed by Bloom and Van Reenen (2007), this study provides evidence that workplace health promotion moderates the link between management practices and productivity. Our panel data estimates show that the positive impact of management practices on productivity is stronger if a firm engages in workplace health promotion. This finding fits the notion that workplace health promotion mitigates adverse side effects of management practices on employees' health. However, our estimates also provide evidence of a negative direct influence of workplace promotion on productivity. The positive moderating influence of workplace health promotion only dominates the negative direct influence if a firm uses Bloom and Van Reenen's management practices (targets, monitoring and incentives) at a high intensity. |
| Keywords: | Targets, Monitoring, Incentives, Employee Health, Workplace Wellness Programs, Firm Performance |
| JEL: | I10 J24 J28 J81 M50 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:trr:wpaper:202505 |
| By: | Caggese, Andrea; Chiavari, Andrea; Goraya, Sampreet Singh; Villegas‑Sanchez, Carolina |
| Abstract: | This paper uses a general equilibrium framework to examine the effects of temperature on firm-level demand, productivity, and input allocation efficiency, deriving an aggregate damage function for climate change. Using data from Italian firms and detailed climate data, it uncovers a sizable negative effect of extreme temperatures on firm-level productivity and revenue-based marginal product of capital. Based on these estimates, the model generates aggregate productivity losses from local temperature fluctuations that are higher than previously thought, ranging from 0.60 to 6.82 percent depending on the scenario and the extent of adaptation. Notably, these losses are approximately four times greater than those estimated by averaging firm-level losses in a representative firm model, which does not capture frictions that alter allocative efficiency in a heterogeneous firm setting. Therefore, incorporating our framework into Integrated Assessment Models is likely to revise upwards the estimated economic costs of climate change. JEL Classification: Q54, D24, D22, O44 |
| Keywords: | aggregate productivity, allocative efficiency, climate change, firms |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253084 |
| By: | Taheri Hosseinkhani, Nima (Auburn University) |
| Abstract: | Purpose: This study synthesizes and evaluates the empirical evidence on the transfer and diffusion of artificial intelligence (AI) by analyzing whether its implementation delivers productivity gains that consistently exceed those of previous general-purpose technologies (GPTs), such as information and communication technology (ICT) and electricity. It aims to clarify the magnitude, mechanisms, and contextual dependencies of AI's impact, framing the issue as a challenge in technology transfer from development to widespread economic application. Methodology: A systematic literature review was conducted following the PRISMA 2020 framework. The search utilized the Consensus academic search engine, covering sources like Semantic Scholar and PubMed, with 22 targeted queries across seven thematic groups. The process involved identifying 1, 100 papers, screening 630, assessing 491 for eligibility, and conducting a full-text analysis and narrative synthesis of the 50 most relevant studies. Methodologies of the included papers range from large-scale panel data regressions and randomized controlled trials to systematic reviews and macroeconomic analyses. Findings: The evidence consistently shows that AI implementation delivers measurable productivity gains at the firm and process levels across various sectors. Key mechanisms for this value capture include cost reduction, process automation, skill-biased labor enhancement, and innovation acceleration. For instance, specific applications like generative AI have been shown to reduce task completion time by 40% and improve output quality by 18%. However, the evidence that these gains consistently surpass those of earlier GPTs is nuanced, revealing lags and barriers characteristic of historical technology transfers. The diffusion of benefits is uneven, disproportionately favoring larger, digitally mature firms with higher absorptive capacity. At the macroeconomic level, AI's contribution to aggregate productivity growth remains limited, echoing the "productivity paradox" observed during the initial transfer of ICT and electricity. Implications: The findings suggest that while AI is a potent productivity driver, realizing its full economic potential is contingent on overcoming key barriers to technology transfer, including the need for complementary investments, organizational restructuring, and workforce upskilling. For policymakers and technology managers, this underscores the need for strategic initiatives that address expertise gaps and integration challenges, thereby fostering more inclusive and widespread technology diffusion and productivity growth. The historical parallels with previous GPTs suggest that the transformative impact of AI may materialize over a longer time horizon than currently anticipated, dependent on the efficiency of these transfer mechanisms. |
| Date: | 2025–07–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:hqp28_v2 |
| By: | Siedschlag, Iulia; Vanegas, Juan Duran |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:esr:wpaper:wp802 |
| By: | Rafael Machado Parente; Sandra Baquie; Yueling Huang; Ms. Florence Jaumotte; Jaden Kim; Samuel Pienknagura |
| Abstract: | This paper empirically studies the relationship between industrial policies (IPs) and firm performance, showing it varies by instrument, firm and industry characteristics, value chain position, and time horizon. Consistent with the trade literature, IPs reducing trade barriers are linked to medium term improvements in firm performance. Subsidies discriminating against foreign interests are linked to short term improvements in value added (VA), productivity and payroll, which fade or turn negative in the medium term. Export incentives are linked to short term declines in firm performance followed by medium term gains. These relationships are stronger for young and financially constrained firms compared to older and less financially constrained firms. Industry distortions also matter—IPs are linked to stronger improvements in VA, capital and payroll in the short term when distortions are high. Finally, we find cross-sectoral spillovers: protective IPs targeting upstream sectors are associated with improved outcomes in downstream firms, while those targeting downstream sectors correlate with weaker upstream performance. Cross-sectoral spillovers from trade liberalizing policies are consistently positive and larger in magnitude, regardless of value chain position. |
| Keywords: | Industrial Policies; Firm Performance; Subsidies; Export Incentives; Productivity |
| Date: | 2025–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/143 |
| By: | Valerio De Stefano; Maddalena Mula; Manuel Sebastian Mariani; Andrea Zaccaria |
| Abstract: | A rich theoretical and empirical literature investigated the link between export diversification and firm performance. Prior theoretical works hinted at the key role of capability accumulation in shaping production activities and performance, without however producing product-level indicators able to forecast corporate growth. Building on economic complexity theory and the corporate growth literature, this paper examines which characteristics of a firm's export basket predict future performance. We analyze a unique longitudinal dataset that covers export and financial data for 12, 852 Italian firms. We find that firms exporting products typically exported by wealthier countries -- a proxy for greater product sophistication and market value -- tend to experience higher growth and profit per employee. Moreover, we find that diversification outside of a firm's core production area is positively associated with future growth, whereas diversification within the core is negatively associated. This is revealed by introducing novel measures of in-block and out-of-block diversification, based on algorithmically-detected production blocks. Our findings suggest that growth is driven not just by how many products a firm exports, but also by where these products lie within the production ecosystem, at both local and global scales. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.21754 |
| By: | Nandwani, Bharti; Roychowdhury, Punarjit; Shankar, Binay |
| Abstract: | This paper examines the impact of a large-scale rural road construction program-the Pradhan Mantri Gram Sadak Yojana (PMGSY)-on the performance of rural manufacturing firms in India. While these firms provide vital non-farm employment in rural areas, their growth is often thought to be constrained by inadequate infrastructure. Leveraging administrative data and the quasi-random rollout of the program, we estimate effects using a two-way fixed effects framework. We find no evidence that improved road connectivity affects turnover, profits, or employment for formal enterprises. In contrast, informal firms experience significant gains in turnover, expenditure, profits, employment, and wage bills. These effects appear to be driven by reductions in infrastructure-related constraints: treated firms report fewer operational problems and less competition from larger firms, particularly in marketing and distribution. Our findings highlight the heterogeneous effects of rural infrastructure expansion and the greater responsiveness of informal enterprises. |
| Keywords: | Firms, India, Infrastructure, Roads, Rural |
| JEL: | D22 O12 O18 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1650 |