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on Efficiency and Productivity |
| By: | Okan Akarsu |
| Abstract: | In this paper, I explore the spillover effects of frontier firms on other firms in Türkiye, using a detailed administrative dataset with firm-level data on balance sheets, inter-firm transactions, and employment. I review key production function estimators, evaluate their assumptions and performance using a large dataset of Turkish firms, and apply estimated productivity to identify frontier firms and assess their influence on laggard firms' performance. Additionally, I contribute to the empirical literature by exploring the spillover and network effects of frontier firms on laggard firms, as well as examining the productivity convergence of laggard firms to frontier firms. The analysis reveals three key findings: (i) Frontier firms generate positive spillover effects within sectors, which enhance sales, employment, exports, and asset growth among laggard firms; (ii) detailed firm-to-firm invoice data reveals that a higher share of frontier firms in a firm’s network significantly boosts investment, net sales, and productivity growth; and (iii) laggard firms show faster productivity growth, with substantial variation across firm types and industries. |
| Keywords: | Spillover effect, Frontier firm, Total factor productivity, Production function estimation, Semiparametric estimator, Laggard firm dynamics |
| JEL: | C13 C14 C23 D24 D40 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:tcb:wpaper:2511 |
| By: | Shujiang Cao; Shutao Cao |
| Abstract: | Measured aggregate productivity and the income share of top earners are strongly and positively correlated in the Canadian data. Productivity slowdown since the early 2000s was accompanied with a flattening income share of top earners. Motivated by these facts, we study the role of firms' top-paid workers and worker matching in accounting for the slowdown of measured total factor productivity. We first estimate total factor productivity for Canadian firms in the period of 2003-2015, taking into account the assortative matching between top workers and non-top workers. Measured total factor productivity consists of the Hicks-neutral technology and the quality of top workers. Our estimation suggests that measured aggregate total factor productivity declined from 2003 to 2015, in line with that estimated by the statistical agency. The decline of measured productivity is entirely accounted for by the declining quality of top workers, while the Hicks-neutral technology improved. Both the within-firm changes and the cross-firm reallocation of top-worker quality are important in contributing to the decline of overall top-worker quality. We also discuss possible causes of declines in the quality of top workers, e.g., the emigration of top talents as studied in recent literature. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.00516 |
| By: | Takpara, Moukaila Mouzamilou |
| Abstract: | The article investigates the contribution of trade facilitation to productivity growth in Sub-Saharan African (SSA) countries. We include four trade facilitation indicators (i.e., physical infrastructure, ICT, business and regulatory environment, border, and transport efficiency) as explanatory factors for productivity growth measured by both total factor productivity and labor productivity. The empirical evidence is based on both Pooled Ordinary Least Squares (POLS) and the Instrumental Variable Two-Stage Least squares (IV-2SLS) in a sample of 29 SSA countries over the period 2004-2017. The main results from the study show that trade facilitation contributes positively and significantly to total factor productivity as well as labor productivity in SSA. Based on this finding, SSA countries need to improve border procedures as well as the business and regulatory environment to generate substantial productivity gains and boost the competitiveness of micro, small and medium-sized enterprises (MSMEs), given the job creation potential of MSMEs. |
| Keywords: | Trade facilitation, Productivity, Sub-Saharan Africa, 2SLS |
| JEL: | F13 F14 O11 O47 |
| Date: | 2025–08–18 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125818 |
| By: | L. Serafini; R. Paci; E. Marrocu |
| Abstract: | This paper investigates the impact of green, digital, and twin transition investments on firm performance in Italy during the 2014-2020 programming period. Drawing on detailed project-level data from the OpenCoesione platform on ERDF-funded initiatives, we classify investments according to their thematic focus and apply a staggered Difference-in-Differences approach to estimate their effects on value added, employment, and labour productivity. Our results show that firms supported through twin transition projects, those combining green and digital components, achieve the most substantial and sustained gains in value added and productivity. These integrated interventions appear particularly effective in enhancing firm performance and capacity utilisation, with employment effects emerging more gradually. Purely green and digital projects also yield positive outcomes, though with more moderate and variable effects. We further document significant heterogeneity across regions and sectors, with stronger impacts observed among firms located in Northern and Southern Italy and in knowledge-intensive sectors. Our findings highlight the importance of strategic investment design - transition-oriented and multi-dimensional projects consistently outperform single-focus initiatives. These results suggest that EU cohesion policy plays a pivotal role in supporting structural transformation, particularly when funding is targeted to integrated projects that align with broader environmental and digital policy goals. |
| Keywords: | Twin Transition;Green policies;Digital policies;Innovation and firm Performance;Cohesion Policy;Counterfactual Impact Analysis |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202511 |
| By: | Anton Ludwig Bonin; Pawel Robert Smolinski; Jacek Winiarski |
| Abstract: | This study investigates the impact of Generative AI on software development within the IT sector through a mixed-method approach, utilizing a survey developed based on expert interviews. The preliminary results of an ongoing survey offer early insights into how Generative AI reshapes personal productivity, organizational efficiency, adoption, business strategy and job insecurity. The findings reveal that 97% of IT workers use Generative AI tools, mainly ChatGPT. Participants report significant personal productivity gain and perceive organizational efficiency improvements that correlate positively with Generative AI adoption by their organizations (r = .470, p |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.16811 |
| By: | Riukula, Krista (ETLA - The Research Institute of the Finnish Economy); Väänänen, Touko (Aalto University) |
| Abstract: | We study the impact of transport-induced agglomeration on workers' earnings, as well as the productivity and costs of establishments, in the capital region of Finland using comprehensive individual- and establishment-level registry data. To our knowledge, we are the first to jointly examine firm- and worker-level effects of agglomeration. We find that improved workplace-to-workplace accessibility increases employees’ annual earnings, particularly among workers in smaller firms. However, we find no statistically significant effects on value added or labour costs per worker at the establishment level. We propose two potential explanations for this discrepancy: (1) differences in the composition of workers between the worker- and establishment-level analyses due to, for example, new hires, and (2) rising costs associated with increased agglomeration. Further analysis reveals that enhanced accessibility leads to higher establishment employment and increased operating expenses, such as rents. Taken together, these findings suggest that the benefits of agglomeration are primarily shared between workers and property owners. |
| Keywords: | transport project, productivity, agglomeration, accessibility |
| JEL: | R41 R42 R12 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18103 |
| By: | Melissa Vega-Monge (Department of Economic Research, Central Bank of Costa Rica); Susan Jiménez-Montero (Department of Economic Research, Central Bank of Costa Rica) |
| Abstract: | This paper analyzes the evolution of productivity of the formal sector in Costa Rica using microdata for the period 2005-2021. Manufacturing, wholesale and retail trade, and agricultural sectors are examined with special emphasis. Our results suggest that total factor productivity (TFP) has exhibited an upward trend since 2015. According to our estimations, firms in manufacturing and those under the Free Trade Zone regime have boosted productivity growth in recent years. However, productivity growth does not seem to be explained by a single economic sector. Similar to our findings in manufacturing, trade and agriculture show a dynamic where firms that experienced increases in their productivity are also the ones increasing their market share, a signal of efficiency. Finally, the estimated productivity exhibits desirable characteristics: it is positively correlated with firms´ export status, the degree of technological sophistication, and the level of socio-economic development and competitiveness of Costa Rica's municipalities. ***Resumen: Este artículo analiza la evolución de la productividad del sector formal en Costa Rica con el uso de microdatos para el período 2005-2021. Se examinan con especial énfasis las actividades de la manufactura, mayorista y minorista y agrícola. Los resultados sugieren que la productividad total de los factores (PTF) ha mostrado una tendencia ascendente desde 2015. las empresas manufactureras y aquellas bajo el régimen de Zona Franca han impulsado el crecimiento de la productividad en los últimos años. Sin embargo, el crecimiento de la productividad no parece explicarse por una única actividad económica. El comercio y la agricultura muestran una dinámica en la que las empresas que experimentaron aumentos en su productividad son también las que aumentan su participación de mercado, una señal de eficiencia. Finalmente, la productividad estimada exhibe características deseables: está positivamente correlacionada con el estatus exportador de las empresas, el grado de sofisticación tecnológica y el nivel de desarrollo socioeconómico y la competitividad de los municipios de Costa Rica. |
| Keywords: | Productivity, Economic Growth, Productividad, Crecimiento económico |
| JEL: | D24 O1 O4 |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:apk:doctra:2309 |
| By: | Gert Bijnens (National Bank of Belgium, Research Department) |
| Abstract: | This paper provides the first systematic and comprehensive empirical study of management and strategy consulting. We unveil the workings of this opaque industry by drawing on universal administrative business-to-business transaction data based on value-added tax links from Belgium (2002-2023). These data permit us to document the nature of consulting engagements, take-up patterns, and the effects on client firms. We document that consulting take-up is concentrated among large, high-labor-productivity firms. For TFP and profitability, we find a U-shaped pattern: both high and low performers hire consultants. New clients spend on average 3 % of payroll on consulting, typically in episodic engagements lasting less than one year. Using difference-in-differences designs exploiting these sharp consulting events, we find positive effects on labor productivity of 3.6% over five years, driven by modest employment reductions alongside stable or growing revenue. Average wages rise by 2.7% with no decline in labor’s share of value added, suggesting productivity gains do not come at workers’ expense through rent-shifting. We do observe organizational restructuring with small increases in dismissal rates, and higher services procurement but reduced labor outsourcing. Our heterogeneity analysis reveals larger productivity gains for initially less productive firms, suggesting improvements in allocative efficiency. Our findings broadly align with ex-ante predictions from surveyed academic economists and consulting professionals, validating the productivity- enhancing view of consulting endorsed by most practitioners though only half of academics, while lending less support to a rent-shifting view favored by many economists. |
| Keywords: | Management Consulting, Productivity, Firm Performance, Network Data, Organizational Change, Allocative Efficiency |
| JEL: | E20 E22 E23 J0 L2 M0 O4 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202508-480 |
| By: | Xiaoyue Zhang; Junjie Xia |
| Abstract: | This paper shows that in an economy where distortions prevent firms from using their profit-maximizing amounts of capital and labor, removing these distortions can generate both an efficiency gain and a higher aggregate labor share. We use firm-level data on Chinese manufacturing, mining, and public utilities in 2005 and estimate a general equilibrium model with heterogeneous productivity, technology, demand elasticities, and distortions across firms. We find that the distortions cause most firms to be too small. Removing them raises the aggregate demand for labor and, holding the aggregate labor and capital fixed, increases the wage by 57%. Consequently, the aggregate labor share rises by 24 percentage points. Aggregate productivity quadruples. |
| Keywords: | Distortions, aggregate labor share, latent market structure, firm heterogeneity |
| JEL: | C4 D3 E1 L6 O1 O5 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2136 |
| By: | Christopher Cotton; Brent Hickman; John List; Joseph Price; Sutanuka Roy |
| Abstract: | Using field-experimental data (study-time tracking and randomized incentives), we identify a structural model of learning. Student effort is influenced by external costs/benefits and unobserved heterogeneity: motivation (willingness to study) and productivity (conversion rate of time into skill). We estimate academic labor-supply elasticities and skill technology. Productivity and motivation are uncorrelated. Low productivity, not low motivation, is the stronger predictor of academic struggles. School quality augments productivity and accelerates skill production. We find that dynamic skill complementarities arise mainly from children's aging and from a feedback loop between investment activity and productivity, rather than from carrying forward past skill stocks. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:feb:framed:00826 |
| By: | Mohammad Azhar Hossain (Southeast Business School (SBS), Southeast University, Bangladesh Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - The primary aim of this research is to examine the bank-specific variables that impact the profitability of banks in Bangladesh. Methodology/Technique – The present study demonstrates the ways in which bank-specific variables have affected the profitability of Bangladeshi banks. Only state-owned commercial banks (SCBs) were considered for this purpose. The study selected six operational SCBs as the sample size, using panel data from 2015 to 2024 to conduct a random effects regression model. Findings – The research examined internal characteristics like size, liquidity risk, operational efficiency, credit risk, financial risk, and capital sufficiency. According to the empirical inquiry, operating efficiency, financial risk, and liquidity risk are the most important bank-specific features that bank managers may use to formulate future strategies. Novelty – Numerous previous investigations have offered diverse insights for the variables affecting bank profitability, including both external and internal factors. This research examined the bank-specific variables that contribute to the profitability of the Bangladeshi banking system, a rising country in South Asia. Furthermore, in this paper, the factors affecting only the SCBs' profitability are clarified, which provides some useful empirical insights in this field. Type of Paper - Empirical" |
| Keywords: | State-Owned Commercial Banks, Profitability, Panel Regression, Internal Factors, Bangladesh |
| JEL: | C23 G21 |
| Date: | 2025–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jfbr229 |
| By: | Zájac, Jan (University of Bristol); Paczos, Wojtek (Cardiff Business School, Cardiff University; Institute of Economics, Polish Academy of Sciences) |
| Abstract: | Using panel data for 92 banks in 11 CEE countries over 2006–2020, we investigate how joining the euro affects bank profitability. Overall the effect is statistically indistinguishable from zero, but in tranquil periods euro membership lowers returns. Higher capital ratios and larger size raise profitability, whereas greater liquidity and loan intensity reduce it. |
| Keywords: | Banks profitability; Euro adoption; Central & Eastern Europe |
| JEL: | F36 G21 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2025/17 |