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on Efficiency and Productivity |
| By: | Fuad, Syed; Hartarska, Valentina; Nadolnyak, Denis |
| Abstract: | Over one million U.S. farmers report ten or fewer years of farming experience, yet little is known about how productivity differences vary across the farm life cycle and Census-panel persistence. We use linked farm-level microdata from the 2012, 2017, and 2022 Censuses of Agriculture to decompose total factor productivity differences for beginning and established farms. Following the X-inefficiency literature, which links inefficiency to managerial ability and organizational performance, we estimate group-specific stochastic frontiers that model technical inefficiency as a function of own-operator managerial-ability proxies and similarity-weighted county-peer averages of those proxies. Differences in scale efficiency account for a large share of productivity dispersion among small farms and are especially pronounced among operations that later leave the Census panel. The community channel accounts for over 40 percent of the identified inefficiency contribution among beginning farms and exceeds the own-operator channel for small beginning livestock operations. The results point to beginning-farmer policies that combine scale-adjustment support with investments in farmer networks, peer learning, extension capacity, and community-based support. |
| Keywords: | Productivity Analysis, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404709 |
| By: | Konstantin A. Kholodilin; Jan-Christopher Scherer |
| Abstract: | The capital stock in Germany and other advanced economies has been aging persistently since 1970s, raising concerns about its implications for productivity, economic growth, and resilience. This study investigates the relationship between capital stock modernity and productivity dynamics using a panel dataset covering 24 European countries between 1997 and 2020. We employ a panel local projections model with split-panel jackknife corrections to address the Nickell-type bias inherent in dynamic panel models with fixed effects. Our analysis controls for human capital, research and development, trade openness, institutional quality, and financial development. The results show that improvements in capital stock modernity exert a positive and statistically significant effect on both total factor productivity (TFP) and labor productivity, although the timing of these effects varies across measures. Specifically, labor productivity growth responds immediately to capital modernization, whereas potential TFP growth increases only from the second year following the shock. |
| Keywords: | Total factor productivity, labor productivity, capital stock, modernity grade |
| JEL: | C23 E22 O47 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2176 |
| By: | Pandit, Rajendra (University of Nepal); Stratton, Leslie (Virginia Commonwealth University) |
| Abstract: | Firm failures have far-reaching consequences for employees, investors, communities, and the broader economy. Less productive firms are generally more likely to fail. However, high productivity may come at a cost that hampers survival, especially during sudden, unforeseen crises such as COVID-19. Using data from the World Bank Enterprise Survey for small and medium-sized enterprises (SMEs) in 20 European countries, this study tests whether there was a nonlinear association between productivity and survival during the COVID-19 pandemic. The findings suggest that SMEs with below-average productivity relative to their industry were more likely to shut down, whereas firms with exceptionally high productivity do not experience additional survival advantages. These results, while not causal, also hold across alternative SME definitions, underscoring the robustness of the results. |
| Keywords: | firm closure, COVID-19, relative productivity |
| JEL: | D24 L25 G33 O30 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18869 |
| By: | Fons-Rosen, Christian; Manchin, Miriam; Szemeredi, Katalin |
| Abstract: | This paper evaluates how trust among affiliates determines the structure of business groups and, in turn, shapes firm productivity. After confirming that greater business group verticality is a desirable trait as it is associated with higher firm productivity, we develop a theoretical model on how bilateral trust impacts group verticality. Testing our predictions on a large European sample, we find that business groups with higher average trust between members have more vertical and complex structures. In addition, firm-level estimations reveal that being a trustworthy affiliate in the business group correlates both with being located in a layer closer to the headquarter and also with greater firm productivity. Results are robust to using somatic and linguistic distance as instruments for bilateral trust. |
| Keywords: | Trust |
| JEL: | F23 M14 L21 L22 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19417 |
| By: | Daniel de Munnik; Kristina Hess; Walter Muiruri; Tuuli McCully; Faiza Noor; Sabreena Obaid; Andrew Plummer; Louis Poirier; Abeer Reza; Jillian Schwartz |
| Abstract: | We present the annual update of the Bank of Canada staff estimates for global potential output growth. Growth in global potential output is expected to remain broadly stable over the projection horizon at just above 3%, underpinned by the general strength in trend productivity growth, including a boost from the adoption of artificial intelligence tools. Partially offsetting these gains are higher tariffs and persistent uncertainty about trade policy that hamper productivity and suppress capital deepening. In addition, population aging slows growth in trend labour input across all regions. These estimates served as key inputs to the analysis supporting the April 2026 Monetary Policy Report. |
| Keywords: | Models and tools; Econometric, statistical and computational methods; Monetary policy; Real economy and forecasting; Structural challenges; Demographics and labour supply; Digitalization and productivity |
| JEL: | E1 E2 F0 F1 O33 O4 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocsap:26-20 |
| By: | Philippe Andrade; Omar Barbiero; Alvaro Silva |
| Abstract: | In 2025, the average realized tariff on U.S. imports rose from about 2.5 percent to about 10 percent. The resulting increase in U.S. firms’ input costs had the potential to raise inflation significantly and explain why inflation remained significantly above the Federal Reserve’s 2 percent target last year. On the other hand, as the tariffs took hold, U.S. workers’ productivity grew, which could have helped companies reduce their costs and thereby mitigate inflationary pressures from the tariffs. To study the extent to which productivity gains may have offset the tariff-driven cost increases, the authors construct measures of sectoral increases in input costs induced by the new tariffs and compare them with sectoral labor productivity gains. |
| Keywords: | tariffs; inflation; labor productivity; input-output linkages; production costs; trade policy; supply chains |
| JEL: | E31 F13 E24 D24 |
| Date: | 2026–08–19 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbcq:103664 |
| By: | Fu, Liang; Li, Gucheng |
| Abstract: | Growing attention has been paid to how agricultural technology adoption affects crop production. However, little is known about the effects of smart agricultural technology on agricultural production performance. This study uses survey data from 1, 146 rice farmers to examine the effects of smart agricultural technology (SAT) adoption on rice yield, technical efficiency, net returns and production costs. To reduce selection bias caused by farmers’ selfselection into SAT adoption, this study applies a doubly robust inverse probability weighted regression adjustment estimator. The results show that SAT adoption significantly increases rice yield, technical efficiency and net returns by 10.63%, 10.26% and 27.69%, respectively. It also reduces production costs by 3.83%. Further analysis shows that SAT adoption significantly reduces fertilizer, pesticide, labor and other inputs. These results are broadly consistent with estimates from propensity score matching and endogenous switching regression models. The findings suggest that promoting SAT adoption among smallholder rice farmers can help increase yield and net returns, improve efficiency, reduce input use and support agricultural green transformation. |
| Keywords: | Productivity Analysis, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404714 |
| By: | Barwick, Panle; Chen, Luming; Li, Shanjun; Zhang, Xiaobo |
| Abstract: | Although entry regulation is ubiquitous across countries, comprehensive evaluations on how such regulations affect firm dynamics and productivity are lacking. We examine a 2012-2014 pilot program in Guangdong (which later became a national policy) that was designed to reduce firm registration costs and encourage entrepreneurial activities. Using administrative data on firms’ business registrations and annual reports, our analysis shows that the reform increased firm entry by 25% and firm exit by 8.7% in the manufacturing sector. The productivity of post-reform entrants was 1.1% higher than the productivity of pre-reform entrants, likely due to relaxed financial constraints and more intense competition. |
| Keywords: | Entry deregulation |
| JEL: | L10 L50 L60 O40 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19439 |
| By: | Fang, Tony (Memorial University of Newfoundland); Harrison, Jennifer (EM Normandie Business School) |
| Abstract: | This practitioner insights paper draws on employer perspectives to examine the challenges and opportunities of AI adoption in SMEs and to develop policy insights to enhance productivity and support sustainable careers. Policy insights are derived from a survey of 1, 700 business owners, executives, and senior managers, with particular attention to SMEs operating in Atlantic Canada. We find that employers associated AI with productivity and efficiency gains, although adoption remained patchy across firms and regions. Many reported uncertainties regarding future skill needs, emphasized compliance training, and viewed AI primarily as a productivity tool. This paper offers rare employer perspectives on the intersection of AI, productivity, and sustainable careers to inform policy. Policymakers and multiple actors across the sustainable career ecosystem can support SME productivity by strengthening digital capabilities, workforce planning systems, and regional skills ecosystems. Such efforts may help ensure that AI adoption contributes to both productivity and sustainable career outcomes. |
| Keywords: | AI, productivity, sustainable careers, SMEs, workforce development |
| JEL: | J21 J23 J24 J28 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18837 |
| By: | Jose, Jibin; Moschini, GianCarlo |
| Abstract: | The production approach recovers markups from output elasticities of flexible inputs and their cost shares in revenue. Recent studies document that markups recovered from different flexible inputs systematically disagree, contradicting the maintained cost-minimization assumption. We show that such conflicting markups arise because standard estimation procedures do not fully exploit the implications of cost minimization. We develop a novel econometric framework that embeds cost-minimization conditions directly into estimation, through cost shares of flexible inputs, while retaining the common Hicks-neutral productivity process. The resulting estimating equation delivers markups that are invariant across flexible inputs by construction. Our findings imply that resolving the conflict in estimated markups across flexible inputs requires only that cost minimization enter the estimation procedure—whether directly, as in our framework, or indirectly via factor-augmenting productivity. These conclusions are illustrated empirically using the Colombian Annual Manufacturing Survey dataset. |
| Keywords: | Research Methods/Statistical Methods |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404719 |
| By: | Agerton, Mark; Keeler, James; Stigler, Matthieu |
| Abstract: | Crop rotation shapes agricultural productivity, input use, and environmental outcomes, yet estimating its effects is complicated by unobserved heterogeneity in crop choice and field productivity. We develop and estimate a dynamic structural model of corn-soybean rotation that jointly identifies the yield gains from rotation, the distribution of field-level heterogeneity, and the profit function governing crop choice. Using satellite-derived data on crop choices and yields for approximately 620 thousand fields in Illinois, Iowa, and Indiana over 2005–2019, we find economically significant rotation effects and substantial heterogeneity in field productivity. The estimated correlation between corn and soybean fixed effects is positive but well below one, leaving meaningful dispersion in the ratio of corn to soy yields across fields. We derive conditions on the variances and correlation of corn and soy productivity under which fields with greater comparative advantage in corn are, on average, also more productive in both crops in absolute terms, and find mixed empirical support: the condition is satisfied in our levels specification but violated at the lower bound in logs. |
| Keywords: | Production Economics |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404688 |
| By: | Leogrande, Angelo; di Molfetta, Mauro; Nortarnicola, Valeria; Trotta, Maria Giovanna; Magaletti, Nicola |
| Abstract: | Italy's special legal status for "innovative" small and medium-sized enterprises (SMEs) grants fiscal, financial and administrative benefits intended to strengthen competitiveness, yet whether the status marks a distinctive profile of realised firm performance remains empirically underexplored. Using ten years of balance-sheet data assembled within the LUCE (LUtech Campus Ecosystem) research project on 4, 043 firms (2, 873 innovative and 1, 170 ordinary), we compare the two populations across six performance dimensions—performance persistence, revenue growth, labour productivity, operating profitability, earnings volatility and financial stability. Because the populations differ systematically in size, sector and location, we use propensity-score matching (1, 031 balanced pairs) and interpret the resulting differential as a conditional innovative-status premium rather than as a causal effect. Innovative SMEs display a large and robust revenue-growth premium—a median growth rate roughly three-and-a-half times that of matched ordinary peers (+17.3 percentage points per year; rank-biserial 0.53)—coexisting with a fragility penalty of higher earnings volatility and lower financial stability; operating profitability is higher but does not survive our robustness battery, and labour productivity is marginally lower. A within-firm event study around the registration date shows that the growth advantage largely predates registration, indicating that the status certifies and renders visible already-dynamic firms rather than causally upgrading them. The premium is strongly and significantly heterogeneous across space—broadest in the South, where local institutions are weakest—consistent with an institutional-substitution boundary condition that a formal region-by-status interaction confirms. The results are robust to nine alternative estimators, multiple-testing correction and hidden-bias diagnostics. We read the innovative-firm register as an informative screening and monitoring device rather than as a policy whose causal returns we measure. |
| Date: | 2026–07–29 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:h5d7r_v1 |
| By: | Distefano, Mimosa; Donnat, Helene; Overman, Henry G.; Shah, Krishan |
| Abstract: | We study productivity disparities across metropolitan and non-metropolitan areas in Great Britain. Spatial disparities in productivity are large and persistent. Using a development accounting framework, we show that differences in area size and in the spatial distribution of human and business capital are key explanatory factors. A combination of area size and human capital explains 30 percent of the productivity variance, increasing to 43 to 57 percent once we add measures of business capital stocks. Applying our framework to a case study of Greater Manchester, we show that large increases in both types of capital are needed to narrow productivity disparities with London, illustrating the scale of the challenge for policies aimed at reducing spatial inequality. |
| JEL: | J1 |
| Date: | 2026–08–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138505 |
| By: | Pratt, Bryan; Hendricks, Nathan; Iovanna, Rich; Wallander, Steven |
| Abstract: | The Conservation Reserve Program (CRP) is the largest agri-environmental program in the United States, with the majority of acres enrolling through land retirement mechanisms. The program seeks to correctly assess the opportunity cost of enrollment, neither over- nor under-incentivizing participation. Within county, this is based on the relationship between soil productivity and rental rates, but the magnitude of this relationship is an empirical question. We address this relationship with county-level estimates based on survey data, estimates based on parcel sales data, and estimates based on remotely-sensed yields. The estimated relationship between soil productivity, yields, and opportunity cost vary across approaches, but a one percent change in soil productivity may be associated with less than a one percent change in opportunity cost. We also illustrate that the likelihood of application to the program varies in highly non-linear ways with respect to estimated relative soil productivity. |
| Keywords: | Resource/Energy Economics and Policy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404743 |
| By: | Colin Davis (Doshisha University); Ken-ichi Hashimoto (Kobe University); Ken Tabata (Kwansei Gakuin University) |
| Abstract: | This paper studies how environmental policy designed to reduce transboundary pollution affects long-run productivity growth through shifts in the geographic location of industry. We construct a two-country endogenous growth and endogenous market structure framework in which there is a positive link between the geographic concentration of industry and the strength of knowledge spillovers from production to innovation. Emissions are generated as a byproduct of production. We show that an increase in the emissions tax of the country with a larger (smaller) share of industry lowers the concentration of industry leading to weaker (stronger) knowledge spillovers and a slower (faster) rate of productivity growth. In addition, we identify cases where a rise in the emissions tax of the country with a smaller share of industry lowers emissions while increasing productivity growth. With endogenous emissions taxes, a numerical analysis shows that stronger knowledge diffusion leads to higher tax rates, faster productivity growth, and lower global emissions. In contrast, trade liberalization leads to lower tax rates and eventually raises global emissions despite faster productivity growth. Our results highlight that the relationship between productivity growth and global emissions depends critically on the form of economic integration. |
| Keywords: | Asset bubbles; Emissions Taxes, Industry Location, Knowledge Diffusion, Trade Liberalization, Productivity Growth, Global Emissions, Endogenous Market Structure, Endogenous Policy |
| JEL: | F12 O40 Q56 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:kyo:wpaper:1129 |
| By: | Tarsia, Romano |
| Abstract: | This paper provides novel firm-level estimates of the economic damages caused by temperature shocks to European firms. I rely on a panel data analysis to show wide heterogeneities in the impact of temperature shocks, which depend on firm characteristics. This paper reveals the importance of micro-level data for quantifying climate damage estimates, as the average relationship between temperature and economic outcomes masks firms’ different susceptibilities to weather shocks. These create both winners and losers, harming less productive firms, particularly those in warmer regions, while benefiting more productive ones. Compared with the pooled marginal effect, the least-productive firms experience negative effects roughly ten times as large, while the most-productive firms experience positive effects roughly three times as large. Additionally, higher temperatures increase exit probability among the least productive firms in warmer regions. I highlight the distributional effects of climate change, and offer insights for adaptation policies. |
| Keywords: | climate change;firms;climate damages;economic performance |
| JEL: | D24 O13 O52 Q54 R11 |
| Date: | 2026–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:140233 |