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on Efficiency and Productivity |
| By: | Bertschek, Irene; Erdsiek, Daniel; Niebel, Thomas; Sack, Robin; Zimmermann, Volker |
| Abstract: | Recent literature has increasingly focused on deciphering the modern productivity puzzle, with particular attention given to the link between digital technologies and firm-level productivity. So far, much of this research has primarily focused on large and publicly listed firms. Leveraging a panel dataset covering German small- and medium-sized enterprises (SMEs) over the period 2016 to 2021, we investigate whether digitalisation can help revive the sluggish productivity growth and narrow the gap between productivity frontrunners and laggards. We measure digitalisation through firms' digital capital stocks (DK) that we derive from a broad measure of digitalisation expenditures. Building on an augmented Cobb-Douglas production function, we examine the relationship between DK and labour productivity (LP ). Our findings show that higher DK is positively associated with higher LP levels, with the effect being even stronger for firms that are already more digitally advanced. Moreover, higher digitalisation expenditures appear to be related to narrowing the productivity gap between laggards and the frontier. |
| Keywords: | Heterogeneity of Digitalisation, Productivity, Firm-level Data |
| JEL: | L25 O14 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:340839 |
| By: | Enstad, Erik (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Comparing the technical efficiency of firms that operate under different production technologies requires a metafrontier framework that envelops group-specific frontiers. Despite a substantial methodological literature and growing applied demand, no comprehensive R pack-age for metafrontier analysis has been available on CRAN. We introduce metafrontier, a package that provides a unified interface for three complementary approaches: the deterministic metafrontier of Battese, Rao, and O’Donnell (2004), the stochastic metafrontier of Huang, Huang, and Liu (2014), and DEA-based metafrontier models. The package estimates group-specific frontiers, constructs the metafrontier envelope, and decomposes efficiency into group technical efficiency and the technology gap ratio. Additional features include the metafrontier Malmquist productivity index with three-way decomposition, bootstrap confidence intervals for technology gap ratios, Murphy–Topel corrected standard errors, latent class metafrontier estimation via the EM algorithm, panel stochastic frontier models with time-varying inefficiency, and ggplot2 visualisation methods. An interoperability layer accepts pre-fitted models from sfaR, frontier, and Benchmarking. We illustrate the package with simulated examples and a Monte Carlo study demonstrating parameter recovery under both metafrontier estimators. All examples and simulations are fully reproducible and complete in under ten minutes on a standard laptop. |
| Keywords: | stochastic frontier analysis; data envelopment analysis; metafrontier; technology gap ratio; productivity; R package |
| JEL: | C14 C51 C61 D24 |
| Date: | 2026–04–30 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhhfms:2026_002 |
| By: | Hang T.T. Nguyen (Otto-von-Guericke University Magdeburg) |
| Abstract: | This paper investigates the relationship between corporate income tax rates (CITR) and firm-level productivity growth using AMADEUS data of 304, 410 observations from 79, 842 European firms from 2006 to 2019. The results imply a robust non-linear relationship: higher CITRs are positively associated with productivity growth for high-productivity firms near the technological frontier and negatively associated with the productivity catch-up of less productive firms. Heterogeneity tests suggest a stronger productivity response to tax rate changes of small and medium-sized enterprises (SMEs) and domestic firms, while I do not find a significant productivity response to tax rate changes for large and multinational firms. The main findings are robust across various productivity estimation methods and model specifications and challenge the conventional view that higher business tax rates have a linear and negative effect on productivity growth. The paper contributes to the ongoing debate about the role of corporate taxation in shaping economic competitiveness and long-term growth. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:mag:wpaper:26006 |
| By: | Xu, Ding, |
| Abstract: | This paper examines the relationship between firm productivity, wage dynamics, and employment patterns in Ethiopia’s manufacturing sector, using firm-level data from the Large and Medium Manufacturing and Electricity Industries Survey (LIMMS) for 2018–2020. In line with the objectives of the SAW-A project — which promotes adequate wages and sustainable livelihoods through improved wage-setting and social dialogue—the study explores how firm characteristics such as size, age, and ownership shape the translation of productivity gains into fair and decent remuneration for workers. |
| Keywords: | labour productivity, wage rate, enterprise, labour market analysis |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ilo:ilowps:995675172102676 |
| By: | Santiago Acerenza; Francisco Rosas |
| Abstract: | This paper studies sensitivity analysis of Stochastic Frontier Models. We elaborate relaxations of the baseline assumptions in the Stochastic Frontier Models and characterize the identified set under this relaxations. Furthermore, we derive the breakdown frontier for a relevant parameter of interest, the average inefficiency of a production unit. We show an application of the procedures on a well known dataset, and make the code available for the interested practitioner. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.26088 |
| By: | Yojiro Ito (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: youjirou.itou@boj.or.jp)); Harumasa Shirakawa (Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: harumasa.shirakawa@boj.or.jp)) |
| Abstract: | The invention of new goods or services, called product innovation, and improvements in production processes, called process innovation, can have distinct impacts on firm performance. By integrating firm-level innovation survey data with financial panel data in Japan, our empirical analysis yields two key findings. First, the increasing prevalence of process innovation over product innovation has been observed over the past two decades. Second, higher market growth stimulates product innovation, which, in turn, contributes to growth in firm sales and employment over several years. In contrast, no such patterns are observed for process innovation. These results suggest that there may be a positive feedback loop between product innovation and firm growth. |
| Keywords: | Economic Growth, Productivity, Product Innovation, Process Innovation |
| JEL: | D22 L1 L25 L53 O25 O31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ime:imedps:25-e-18 |
| By: | Beate Deixelberger (University of Graz, Austria) |
| Abstract: | Empirical evidence on the productivity effects of environmental regulation remains inconclusive, with mixed findings across studies. Using a large-scale panel of EU firms from 2013 to 2022, this paper examines how environmental policy stringency affects firm-level productivity. Productivity is estimated from production functions and regressed on policy stringency, measured using the OECD Climate Actions and Policies Measurement Framework, in a dynamic distributed-lag panel framework. Baseline estimates point to small and often statistically insignificant aggregate effects that are highly sensitive to macroeconomic conditions, reflecting policy-macro co-movement. Decomposing sectoral policies by instrument type suggests potentially offsetting effects, which attenuate once policy-macro co-movement is accounted for. Allowing for sectoral heterogeneity, however, reveals pronounced differences across industries, with more negative responses in input-intensive and regulation-exposed sectors and more positive ones in less exposed, more flexible sectors. These findings indicate that aggregate estimates mask economically meaningful heterogeneity across sectors and policy instruments, thereby helping to reconcile the mixed empirical evidence. |
| Keywords: | Environmental policy, Firm productivity, Sectoral heterogeneity, Porter hypothesis, Dynamic panel data, European Union |
| JEL: | Q58 D24 C23 L25 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:grz:wpaper:2026-06 |
| By: | Somnath Sharma; Mr. Kenichi Ueda |
| Abstract: | We find that public administration digitalisation, carried out state-by-state in India between 2010 and 2015, led to an improvement in micro-enterprise productivities, based on the Unincorporated Non-Agricultural Enterprises Surveys. We categorise the digitalisation of public administration into six groups: tax filing and payments, construction permits, environment and labour regulations, inspections, commercial disputes, and single-window systems. States are ranked according to the subsets of digitalisation carried out by them. Using the difference-in-difference estimations with propensity score matching, we find that the average firm-level productivities have risen in the states carrying out more digitalisation. There, also, dispersions in productivities have become narrower. |
| Keywords: | Productivity growth; productivity dispersion public administration digitalisation; business environments reforms; propensity score matching |
| Date: | 2026–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/086 |
| By: | Uğur Aytun; Eren Gürer; Erol Taymaz |
| Abstract: | In December 2017, the government of Türkiye announced a comprehensive ban on the procurement of outsourced services by public institutions and mandated that all workers providing such services on-site be transitioned into permanent public positions within six months. We study the labor-market consequences of this abrupt and large-scale policy change using an administrative, linked employer–employee dataset. We find that workers who transitioned into public employment experienced higher wages and improved job security. At the firm level, private service providers with greater exposure to the reform faced higher exit rates and, if they survived, declines in employment, productivity, and profitability. In contrast, municipal-owned enterprises that internalized service provision became more productive and profitable. We also document modest positive wage spillovers in local labor markets. Overall, our results suggest that the outsourcing ban reallocated rents away from private service providers toward workers and public employers. |
| Keywords: | public employment, outsourcing reform, labor market spillovers, firm dynamics, productivity |
| JEL: | J31 J38 J62 L33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12636 |
| By: | Biagini, Luigi |
| Abstract: | Producer Organisations (POs) are a central instrument of the Common Agricultural Policy (CAP), designed to strengthen farmers’ collective action, improve their market position and promote sustainable agricultural practices. Despite their long-standing policy relevance, evidence on whether PO membership yields measurable benefits at the individual farm level remains limited and inconclusive, particularly in the European context. This paper assesses the causal impact of PO membership on farm performance in the Italian fruit and vegetable (F&V) sector, where the PO model is most established and widespread. Using microdata from the Italian Farm Accountancy Data Network (FADN) covering the period 2014-2022, the study applies a Double Debiased Machine Learning (DDML) estimator to evaluate the effects of PO participation across multiple performance dimensions aligned with the objectives of Article 46 of Regulation (EU) 2021/2115. These dimensions include economic competitiveness, efficiency, financial structure, commercial and qualitative performance, environmental sustainability, risk management, and labour composition. Results reveal a nuanced and heterogeneous pattern across production systems. For permanent crop farms, PO membership is associated with improvements in output valorisation, quality-certified production, direct sales, investment intensity, and environmental indicators, alongside lower profitability margins and reduced asset turnover, suggesting a trade-off between quality upgrading and short-term cost efficiency. In contrast, for horticultural farms, the effects are more limited and often statistically insignificant. Overall, these contrasting patterns underline the importance of accounting for heterogeneity between production systems when evaluating the economic impacts of PO membership and suggest that policy interventions should be tailored accordingly. The study contributes to the literature in two main ways. First, it provides the first comprehensive multidimensional causal evaluation of PO membership effects in a major EU F&V producing country, explicitly comparing different production systems. Second, it demonstrates the value of the DDML approach for agricultural impact assessment, showing how high-dimensional causal methods can uncover complex and sometimes conflicting effects of collective action on farm performance. |
| Keywords: | Production Economics |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aes026:397880 |
| By: | Cevat Giray Aksoy; Nicholas Bloom; Steven Davis; Victoria Marino; Cem Özgüzel |
| Abstract: | This paper studies the long-term impact of a permanent shift to fully remote work in the call center division of a major multinational firm. Using detailed administrative data, we document three key findings. First, the shift to remote work enabled the firm to tap into previously underutilized segments of the labor force and substantially reshaped the composition of its workforce-increasing the share of women (including married women), older individuals, and those living in small towns and rural areas. Second, remote work led to sustained improvements in productivity, driven primarily by shorter call durations, without compromising service quality. Third, employees who received initial in-person training prior to going remote exhibited higher long-term productivity and lower attrition, highlighting the critical role of in-person onboarding in fully remote settings. |
| Keywords: | fully remote work, working from home, workforce mix, productivity |
| JEL: | J2 J3 R1 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2544 |
| By: | Francesco Paolo Conteduca; Marco Errico; Fabrizio Leone; Ludovic Panon; Giacomo Romanini |
| Abstract: | Bilateral trade shocks affect firms in third countries by redirecting demand and reallocating competition across markets, creating winners and losers. We propose a tractable trade model with heterogeneous firms to decompose firm-level export responses as a function of destination-specific changes in demand, own-price and cross-price elasticities, and external economies of scale. Using the 2018–2019 US-China trade war as a source of exogenous variation and data on the universe of Italian firms, we show how bilateral trade shocks occurring elsewhere identify these primitives for third countries. On average, the US-China trade war created a 2.5% export gain, albeit with substantial heterogeneity across firms. The external economies of scale channel accounts for three-quarters of changes in export performance. |
| Keywords: | firm heterogeneity, reallocation, scale economies, trade wars |
| JEL: | D21 D22 E65 F13 F14 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12629 |
| By: | Brot, Robert; Curzi, Daniele; Palma, Alessandro; Russo, Simone; Pallante, Giacomo |
| Abstract: | The increasing intensity of extreme weather events poses a major challenge to agriculture by undermining crops growth conditions. This is particularly critical for wine production, where the quality of wine strongly depends on crops’ life cycle. Such changes create significant difficulties for wine farms, especially those operating under Geographical Indication (GI), which, as a matter of fact, imposes restrictions on the farms’ productivity. Against this background, the existing literature has overlooked the extent to which the limits imposed by these policies affect farms’ adaptation capacities to extreme weather events. The objective of this study is to empirically analyse the effect of extreme weather events on farm-level productivity, focusing especially on PDO wine farms in Italy. Preliminary results, capturing the short-term effect, indicate the higher crop’s losses for PDO vineyards. These findings serve as a pivot point for further reflection on long-term impacts, measuring the adaptation capacity among PDO wine farms. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aes026:397888 |
| By: | Eerola, Essi; Peltonen, Juho; Pönkä, Harri |
| Abstract: | This paper describes the framework used by the Bank of Finland to assess the cost competitiveness of the Finnish economy. We discuss the conceptual foundations, data choices, and methodological trade-offs involved in constructing commonly used indicators, with particular emphasis on labour-cost-based measures in a monetary union context. The analysis focuses on compensation per employee and unit labour costs for the whole economy, complemented by indicators for the manufacturing sector as a proxy for tradable activities. Using national accounts data and the European Commission's Autumn 2025 forecast, we illustrate the indicators and evaluate their robustness to alternative methodological choices. Overall, the results show that while different indicators highlight somewhat different aspects of cost competitiveness, the main conclusions are robust to reasonable variations in reference groups, weighting schemes, and adjustments. The paper aims to provide a transparent and consistent basis for interpreting Finland's cost competitiveness and to support informed policy discussions. |
| Keywords: | cost competitiveness, compensation per employee, unit labour costs |
| JEL: | F10 F40 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofecr:340861 |