|
on Efficiency and Productivity |
|
Issue of 2010‒10‒23
fifteen papers chosen by |
| By: | MORIKAWA Masayuki |
| Abstract: | This paper estimates the total factor productivity (TFP) of hospitals by using panel data drawn from prefectures and secondary medical areas. The study focuses on the economies of scale at the medical area and hospital levels. It uses the average length of stay as a measure of medical quality. We avoid case-mix bias by using data from medical areas instead of those from the hospital level. We control unobservable regional characteristics by employing panel data estimation. We eliminate price disparities among regions by using quantity data. Our results show that hospital size affects productivity: the larger the hospital, the higher the productivity. The hospital-size effect is economically significant: hospital productivity increases by more than 10% when the size of the hospital doubles. The size effects are null when we do not control the average length of stay. The main policy implication is the clear fact that consolidating hospitals improves productivity. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10050&r=eff |
| By: | Maria Nieswand; Matthias Walter |
| Abstract: | Subsidies are considered important means to facilitate the provision of public transit, yet the empirical evidence implies that they can have harming effects on costs and possibly also on operators' performance. This paper examines the impacts of deficit-balancing subsidies on the cost inefficiency of local public bus companies in Germany, where a complex system allocates ample financial support. Our empirical analysis relies on a unique dataset of 33 companies observed over a period of up to twelve years for a total of 231 observations. We employ a stochastic frontier cost function for panel data that account for unobserved heterogeneity and provide firm-specific, time-varying inefficiency estimates. Further, we allow variations in the optimal technology by randomizing some cost functions' coefficients in one of our model specifications. Subsidies directly enter the inefficiency function as a heteroscedastic variable. We find a positive effect of subsidies on the standard deviation of inefficiency, which implies that the range of companies' inefficiency increases with the level of subsidies relative to total costs. However, we also find that non-subsidized firms perform better in terms of cost efficiency. |
| Keywords: | Stochastic cost frontier, subsidies, heteroscedasticity, local public bus transportation, cost efficiency, panel data |
| JEL: | C13 D24 L92 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1071&r=eff |
| By: | Clara Inés Pardo Martínez |
| Abstract: | This paper presents an analysis of energy efficiency performance in the automotive industry from evidence of Germany and Colombia in order to show important features in energy use between countries with the different income between 1998 and 2007. We found that the automotive industry improved its energy efficiency in each country. In order to understand the driving forces behind these trends, the concept of the production function is used to obtain the elasticities of substitutions and the relationships between several variables and energy efficiency performance in German and Colombian motor vehicle industries. In both countries, we found that the variables of energy prices and sizes of companies each have a positive influence on the efficiency of the gross production/energy ratio. These results show that, in the motor vehicle industry, energy efficiency performance depends on different factors. Hence, variables such as energy prices, energy taxes, economies of scale and technology changes have played a crucial role in the improvements in productivity and rational energy use. |
| Date: | 2010–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:col:000137:007582&r=eff |
| By: | Gustavo Crespi; Pluvia Zuniga |
| Abstract: | This study examines the determinants of technological innovation and its impact on firm labor productivity across six Latin American countries (Argentina, Chile, Colombia, Costa Rica, Panama, and Uruguay) using micro data from innovation surveys. In line with the literature, in all countries firms that invest in knowledge are more able to introduce new technological advances, and those that innovate have greater labor productivity than those that do not. Yet firm-level determinants of innovation investment are much more heterogeneous than in OECD countries. Cooperation, foreign ownership, and exporting increase the propensity to invest in innovation activities and encourage innovation investment in only half of the countries studied. Scientific and market sources of information have little or no impact on firm innovation efforts, which illustrates the weak linkages that characterize national innovation systems in those countries. The results in terms of productivity, however, highlight the importance of innovation in enabling firms to improve economic performance and catch up. |
| Keywords: | Innovation, Productivity, Developing countries, Latin America, Innovation surveys |
| JEL: | O12 O14 O31 O33 O40 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4690&r=eff |
| By: | KONISHI Yoko; NISHIYAMA Yoshihiko |
| Abstract: | In this paper we measure the productivity of service industries using micro dataset. The "service industry" is a very broad category including many sectors, such as education, finance, insurance, transportation, logistics, food service, and many more. These sectors exhibit, in our understanding, very different structures from one another, and it is not easy to construct one model that can be applied to all service sectors. It is common in the literature to measure the productivity of manufacturing industries, typically by the Solow residual or its modification from production function estimations. We may possibly follow the same track in studying productivity in service industries. However, they may be different in their structures. In the case of hair salon services, it is impossible for service providers to hold inventories. They can serve only when customers arrive at the hair salon.1In this paper, we study the case of hairdressers using micro data collected by hair salons. We believe that our approach is applicable to the food industry, beauty industry and health clinic industry. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10051&r=eff |
| By: | FRANCISCO MARCOS (Instituto de Empresa); JUAN SANTALO (Instituto de Empresa) |
| Abstract: | This paper estimates the average effect of regulatory intensity and administrative redtape on productivity and innovation. For this purpose we exploit the exogenous variation of the decentralization process that has taken place in Spain during the last three decades. Using objective proxies for legislative and regulatory activity such as the number of pages and number of new norms published in the regional legislative reporters we find a strong negative impact of regulatory intensity on regional innovation and productivity. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:emp:wpaper:wp10-04&r=eff |
| By: | Noriaki Matsushima; Laixun Zhao |
| Abstract: | This paper examines the relationship between firms' productivity improvement and the volume of exports, and shows that it can be sometimes negative. Specifically, we simultaneously take into account intermediate retailers (i.e., vertically) and multimarket linkages (i.e., horizontally). We find that an improvement of the manufacturing productivity affects the bargained wholesale prices in opposite directions in asymmetric markets, causing retailers to make corresponding changes that look surprising. This result can explain for the empirical "left productivity puzzle" found in Ghemawat et al. (2010). Related to this issue is the relationship between buyer power (caused by a retail merger) and profitability. Contrary to the existing literature, in an extended setup, we find that the merger between the downstream duopolists does not improve their profits if their bargaining power is strong vs. upstream suppliers. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0797&r=eff |
| By: | OKUBO Toshihiro; Rikard FORSLID |
| Abstract: | The present paper focuses on sorting as a mechanism behind the well-established fact that there is a central region productivity premium. Using a model of heterogeneous firms that can move between regions, Baldwin and Okubo (2006) show how more productive firms sort themselves to the large core region. We extend this model by introducing different capital intensities among firms and sectors. In accordance with empirical evidence, more productive firms are assumed to be more capital intensive. As a result, our model can produce sorting to the large regions from both ends of the productivity distribution. Firms with high capital intensity and high productivity, as well as firms with very low productivity and low capital intensity, tend to relocate to the core. We use region and sector productivity distributions from Japanese micro data to test the predictions of the model. Several sectors show patterns consistent with two-sided sorting, and roughly an equal number of sectors seem to primarily be driven by sorting and selection. We also find supportive evidence for our model prediction that two-sided sorting occurs in sectors with high capital intensity. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10056&r=eff |
| By: | Broberg, Thomas (National Institute of Economic Research); Marklund, Per-Olov (Centre for Regional Science); Samakovlis, Eva (National Institute of Economic Research); Hammar, Henrik (Centre for Regional Science) |
| Abstract: | <p>Swedish environmental policy often emphasizes the importance of “taking the lead”. For example, Sweden has chosen a more ambitious climate policy target than required by the European Union (EU), namely a reduction of Swedish emissions of greenhouse gases by 40 percent by 2020 compared to the 1990 level. Government Bill 2008/09:162 emphasizes Sweden’s role as a good example in making an effort to re-duce climate change by showing that an offensive climate policy can indeed be com-bined with high economic growth. This view of environmental policy is, however, the subject of constant debate. <p>A common argument is that environmental requirements induce private costs by forc-ing firms to make investments that crowd out other more productive investments, which hampers productivity growth and therefore competitiveness. Professor Mi-chael E. Porter of Harvard questioned this argument, and his view has become known as the Porter hypothesis (Porter, 1991). This hypothesis implies that levying stringent environmental regulations on firms enhances their productivity compared to competi-tors not subject to, or subject to lax, environmental regulations. A central message is that the connection between environmental regulation and competitiveness should be scrutinized within a dynamic framework (Porter and van der Linde, 1995). <p>The main objective of this paper is to test the Porter hypothesis by assessing static and dynamic effects of environmental policy on productivity within the Swedish manufac-turing industry, specifically on the component total efficiency. The paper adds mainly to previous literature by using unique data on environmental protection investments, divided into investments in pollution control and pollution prevention, as a proxy for envi-ronmental regulation. The distinction between these types of investments is crucial to the understanding of the outcomes anticipated by the Porter hypothesis. <p>The international literature studying the Porter hypothesis is extensive. A comprehen-sive review reveals that neither theoretical nor empirical literature gives general sup-port for the hypothesis (Brännlund and Lundgren, 2009). We argue that, to some ex-tent, the Porter hypothesis has not yet been given a fair chance in the empirical litera-ture, as dynamic effects are often neglected in empirical tests. Two exceptions are Managi et al. (2005) and Lanoie et al. (2008), who first estimate Total Factor Produc-tivity (TFP) scores that then are used as dependent variables in regression analyses where explanatory lagged environmental stringency measures model dynamic effects. A disadvantage with these studies is, however, that environmental stringency is ap-proximated by the cost of complying with environmental command- and-control regulations, such regulations are not emphasized by the Porter hypothesis. <p>The empirical test of the Porter hypothesis is performed as a two-step procedure, where total efficiency scores are first estimated by adopting a stochastic production frontier function approach. In the second step, the efficiency scores are used as the dependent variable in random effects regression analyses, where the independent vari-ables are, e.g., investment in pollution control and pollution prevention. In order to assess whether these investments have dynamic effects on total efficiency these vari-ables are also lagged. If positive effects are established we cannot reject the claim that environmental leadership will benefit the Swedish industry. The estimations are based on firm level data from five Swedish industries for the period 1999-2004, and carried out for the pooled data as well as for the industries separately. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nierwp:0119&r=eff |
| By: | K. DE WITTE; M. VERSCHELDE |
| Abstract: | Various applications require multilevel settings (e.g., for estimating fixed and random effects). However, due to the curse of dimensionality, the literature on non-parametric efficiency analysis did not yet explore the estimation of performance drivers in highly multilevel settings. As such, it lacks models which are particularly designed for multilevel estimations. This paper suggests a semi-parametric two-stage framework in which, in a first stage, non-parametric efficiency estimators are determined. As such, we do not require any a priori information on the production possibility set. In a second stage, a semiparametric Generalized Additive Mixed Model (GAMM) examines the sign and significance of both discrete and continuous background characteristics. The proper working of the procedure is illustrated by simulated data. Finally, the model is applied on real life data. In particular, using the proposed robust two-stage approach, we examine a claim by the Dutch Ministry of Education in that three out of the twelve Dutch provinces would provide lower quality education. When properly controlled for abilities, background variables, peer group and ability track effects, we do not observe differences among the provinces in educational attainments |
| Keywords: | Productivity estimation; Multilevel setting; Generalized Additive Mixed Model; Education; Social segregation |
| JEL: | C14 C25 I21 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:10/657&r=eff |
| By: | Clara Inés Pardo Martínez |
| Abstract: | Improved Energy-Efficiency (EE) helps not only in enhancing competitiveness through cost reduction but also in minimising environmental degradation. A good understanding of factors influencing EE, however, is essential for EE improvement. This chapter attempts to determine these factors in the German and Colombian manufacturing industries. Based on the primary data from German and Colombian industrial associations and representative industries, the factors that could influence energy efficiency performance are studied. These factors are classified a priori under three categories: Economic Factors (EF), Production Technology Factors (TF), and Political Factors (PF). Based on the primary data, the results in both countries should indicate that energy management for the industrial sector is important within business strategy and that the quantification and assessment of energy consumption and energy efficiency are input indicators to improve and optimise processes within a sustainability development. Moreover, the results show that in German industry, an adequate combination of economical, technical and political factors is important to achieve better energy efficiency performance, whereas in the Colombian case, improvements in energy efficiency are closely related with economic and production technology factors. The results suggest that policy strategies in the industrial sector have to comprise legal and fiscal instruments and voluntary agreements to generate supporting framework conditions to improve energy efficiency. Moreover, it is important to strengthen international cooperation for scaling up of sustainable energy solutions in developing countries. |
| Date: | 2010–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:col:000137:007583&r=eff |
| By: | Helen Higgs; Andrew C Worthington |
| Keywords: | Economies of scale, Economies of scope, Cost efficiency, Superannuation, Pension funds |
| JEL: | C21 D24 G23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:gri:fpaper:finance:201015&r=eff |
| By: | E. Abdul Azeez |
| Abstract: | This paper examines the performance of Indian manufacturing sector in terms of economic capacity utilization (CU), over 1974-1998. An attempt is also made to understand the impact of policy changes, inter alia, on the observed movements of CU. The economic CU, defined as the realization of output at which the short run average total cost is minimized, is estimated using a translog cost function. [Working Paper No. 334] |
| Keywords: | India, Manufacturing, Capacity Utilization, Economic reforms |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3031&r=eff |
| By: | Chris Bojke (Centre for Health Economics, University of York, UK); Adriana Castelli (Centre for Health Economics, University of York, UK); Mauro Laudicella (Centre for Health Economics, University of York, UK); Andrew Street (Centre for Health Economics, University of York, UK); Padraic Ward (Centre for Health Economics, University of York, UK) |
| Abstract: | At a time when there are severe pressures on reducing public spending there is increasing emphasis on determining which parts of the country secure best value for money in the NHS. By linking together large scale and routinely collected datasets we produce and compare productivity estimates across the ten Strategic Health Authorities in England in 2007/08. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:chy:respap:57cherp&r=eff |
| By: | Antonella Caiumi (ISAE - Institute for Studies and Economic Analyses) |
| Abstract: | This study uses data on regional tax incentives for business investments in Italy to ask: How much additional investment was stimulated by the government intervention? Or does public financing displace private financing? To what extent would the outcomes on firm performance not have been achieved without public support? The methodology consists of applying the matching approach in order to select a sample of firms composed by both recipients and non-recipients such that for each subsidised firm is found a comparable unsubsidised counterpart, similar in every respect except for the tax benefit, and then estimate a structural model of investment behaviour with the aim of recovering the tax-price elasticity and testing the sensitivity of investment decisions to the availability of internal funds by taking into account the dynamic structure underlying capital accumulation. The novelty of our approach allows us to deal with the problem of the endogeneity of firms' participation decisions as well as to account for the different channels through which fiscal incentives operate. Finally, the impact of the investment tax credit on TFP levels is identified by modelling productivity dynamics at firm level. |
| Keywords: | Investment incentives, Productivity dispersion, State aid |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:isa:wpaper:126&r=eff |