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on Efficiency and Productivity |
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Issue of 2011‒02‒05
fourteen papers chosen by |
| By: | Bernard Fingleton (Department of Economics, University of Strathclyde.); Miguel Gómez-Antonio (Department of Public Finance and Fiscal System,Universidad Complutense de Madrid) |
| Abstract: | In this paper we examine whether variations in the level of public capital across Spain?s Provinces affected productivity levels over the period 1996-2005. The analysis is motivated by contemporary urban economics theory, involving a production function for the competitive sector of the economy („industry?) which includes the level of composite services derived from 'service' firms under monopolistic competition. The outcome is potentially increasing returns to scale resulting from pecuniary externalities deriving from internal increasing returns in the monopolistic competition sector. We extend the production function by also making (log) labour efficiency a function of (log) total public capital stock and (log) human capital stock, leading to a simple and empirically tractable reduced form linking productivity level to density of employment, human capital and public capital stock. The model is further extended to include technological externalities or spillovers across provinces. Using panel data methodology, we find significant elasticities for total capital stock and for human capital stock, and a significant impact for employment density. The finding that the effect of public capital is significantly different from zero, indicating that it has a direct effect even after controlling for employment density, is contrary to some of the earlier research findings which leave the question of the impact of public capital unresolved. |
| Keywords: | Public capital, urban economics, spatial econometrics. |
| JEL: | C21 R11 R12 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1102&r=eff |
| By: | Cette, G.; Chang, S.; Konte, M. |
| Abstract: | An empirical analysis is conducted on two panels of 18 OECD countries to test whether the elasticity of hourly productivity to working time is negative and decreasing with working time itself. If so, the decreasing returns on working time could be indicative of a fatigue effect that increases with working time. We find that the elasticity of productivity per hour to working time is negative and decreasing with working time, but its coefficient is not strongly significant. This study offers empirical support for the hypothesis of a fatigue effect that increases with working time, but with some reservations. |
| Keywords: | Productivity, Working time, decreasing returns. |
| JEL: | J24 F01 O11 O47 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:315&r=eff |
| By: | Alessio, Moro; Galo, Nuño |
| Abstract: | In this paper we investigate the role of technological differences between the construction sector and the general economy in the evolution of real housing prices. In particular we ask whether the recent soar in housing prices across countries reflects the different trends of total factor productivity (TFP) in the construction sector versus the other sectors. To do this, we first compare housing and construction prices in the U.S., the U.K., Germany and Spain. We find that the two prices follow a similar pattern before 1997 and diverge afterwards in all countries. Second, we perform a growth accounting exercise to measure the contribution of relative TFP on the price of construction relative to GDP for the four countries. We find evidence of a strong positive contribution of relative TFP to construction prices in the case of the United States and Germany. Instead, in the case of Spain and the U.K., relative TFP has contributed negatively to the evolution of construction prices, which have grown due to the dynamics of wages and capital returns. We conclude that in these two countries, market conditions, rather than technological factors, have been the main culprits of the recent soar in housing prices. |
| Keywords: | House prices; TFP; growth accounting; Cobb-Douglas |
| JEL: | O11 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28257&r=eff |
| By: | Manuel García-Santana (CEMFI, Centro de Estudios Monetarios y Financieros); Josep Pijoan-Mas (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | In this paper we quantify the effects of the Small Scale Reservation Laws in India on the aggregate productivity, aggregate output and welfare of the Indian economy. To this end, we extend the span-of-control model by Lucas (1978) into a multi-sector setting and embed it into the neo-classical growth model. Our main theoretical contribution is to model the occupational choice within this framework. We fully calibrate our model to data from India for the early 2000’s. We find that lifting the Small Scale Reservation Laws would increase output per worker by 3.2 percent, capital per worker by 7.1 percent and aggregate TFP by 0.8 percent. Within manufacturing, output per worker would increase by 9.8 percent, capital per worker by 12.5 percent and TFP by 3.6 percent. Average firm size in manufacturing would raise from 19 to 69 employees. These are large numbers given that the size of the restricted sector is only 12 percent of manufacturing value added and 3 percent of total GDP. However, this conspicuous type of size-dependent policy cannot account for the large gap in manufacturing TFP existing between the US and India. |
| Keywords: | Firm size, TFP differences, occupational choice, multisector growth models. |
| JEL: | O41 O47 E23 L11 L26 J24 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2010_1010&r=eff |
| By: | CHATTI, Mohamed Ali; KABLAN, Sandrine; YOUSFI, Ouidad |
| Abstract: | The current paper analyzes the performance and the choice of portfolio in Islamic banks. We consider a sample of 8 Malaysian universal Islamic banks between 2004 and 2008. We use the Herfindahl-Hirschman Index (HHI) as an indicator of the degree of diversification. The performance of the banks is measured by the return on assets ratio (ROA) and the Risk Adjusted Return On Capital ratio (RAROC). Finally, we use the Modern Portfolio Theory (MPT) of Markowitz to define the efficient frontier and the optimal portfolio.The results show that the corporate and investment activity increases significantly returns on assets. However, retail and commercial activity improves the results and performance of these banks. We find evidence that the level of diversification is not too high and recommend that they become concentrated on just one type of these activities. Finally, the MPT supports the idea that Islamic banks are not efficient. |
| Keywords: | Diversification; performance; Islamic banks; Herfindhal Hirschmann Index; Modern Portfolio Theory. |
| JEL: | G11 C01 G21 |
| Date: | 2010–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28348&r=eff |
| By: | Martin Brown (Swiss National Bank, Tilburg University); Ralph De Haas (EBRD) |
| Abstract: | Based on survey data from 193 banks in 20 countries we provide the first bank-level analysis of the determinants of foreign currency (FX) lending in emerging Europe. We find that FX lending by all banks, regardless of their ownership structure, is strongly determined by the macroeconomic environment. We find no evidence of foreign banks ‘pushing’ FX loans indiscriminately because of easier access to wholesale funding in foreign currency. In fact, while foreign banks do lend more in FX to corporate clients, they do not do so to retail clients. We also find that after a take-over by a foreign bank, the acquired bank does not increase its FX lending any faster than a bank which remains in domestic hands. |
| JEL: | O1 P2 P5 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ebd:wpaper:122&r=eff |
| By: | Brown, Sarah (University of Sheffield); McHardy, Jolian (University of Sheffield); McNabb, Robert (Cardiff University); Taylor, Karl (University of Sheffield) |
| Abstract: | Using matched employer-employee level data drawn from the 2004 UK Workplace and Employee Relations Survey, we explore the determinants of a measure of worker commitment and loyalty (CLI) and whether CLI influences workplace performance. Factors influencing employee commitment and loyalty include age and gender, whilst workplace level characteristics of importance include human resource practices. With respect to the effects of employee commitment and loyalty upon the workplace, higher CLI is associated with enhanced workplace performance. Our findings that workplace human resources influence CLI suggest that employers may be able to exert some influence over the commitment and loyalty of its workforce, which, in turn, may affect workplace performance. |
| Keywords: | commitment, financial performance, labor productivity, loyalty |
| JEL: | J20 J50 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5447&r=eff |
| By: | Hector Perez-Saiz |
| Abstract: | In many industries, firms usually have two choices when expanding into new markets: They can either build a new plant (greenfield entry) or they can acquire an existing incumbent. In the U.S. cement industry, the comparative advantage (e.g., TFP or size) of entrants versus incumbents and regulatory entry barriers are important factors that determine the means of expansion. Using a rich database of the U.S. Census of Manufactures (1963-2002), an entry game is proposed to model this decision and estimate the supply and demand primitives to determine the importance of these factors. Two policies that affect the entry behavior and industry equilibrium are considered: An asymmetric environmental policy that creates barriers to greenfield entry and a policy that creates barriers to entry by acquisition. In the counterfactual analysis it is found that a less favorable environment for acquisitions during the Reagan-Bush administration would decrease the acquired plants by 90% and increase greenfield entry by 21%. Also, the Clean Air Act Amendments of 1990 increased the number of acquisitions by 3.5%. Furthermore, my simulations suggest that regulations that create barriers to greenfield entry are less favorable in terms of welfare than regulations that create barriers to entry by acquisition. Finally, it is shown how the parameter estimates change with the traditional approach in the entry literature where entry by acquisition is not considered, and when using a simple OLS estimation. |
| Keywords: | Productivity; Market structure and pricing; Econometric and statistical methods |
| JEL: | L13 L40 L61 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:11-1&r=eff |
| By: | Romain Bouis; Romain Duval |
| Abstract: | This paper provides an illustrative assessment of the impacts on potential GDP over a 5 to 10-year horizon of structural reform scenarios in the areas of product and labour markets, relying on existing OECD empirical studies. Results of simulations suggest that a gradual alignment of product market regulations to best practice in a broad range of non-manufacturing sectors could boost aggregate labour productivity levels by several per cent over the next decade in many OECD countries, and by over five per cent across most of continental Europe, as well as for the BRIICS. Relaxation of job protection legislation could also raise productivity growth for a while in many OECD and non-OECD G20 countries, although the effects are estimated to be smaller than those from product market reforms. In a scenario under which they would be phased in relatively quickly, labour market reforms in the areas of unemployment benefit systems, activation policies, labour taxes and pension systems could raise employment rates by several percentage points in a number of OECD countries over a 10-year horizon. Large continental European countries would have the largest benefits to reap from reforms. The overall potential GDP gain for the average OECD country from undertaking the full range of reforms considered here might come close to 10% at a 10-year horizon, indicating the presence of ample room for structural reforms to offset the permanent GDP losses from the recent crisis.<P>Augmenter la croissance potentielle après la crise : une évaluation quantitative des gains potentiels de différentes réformes structurelles au sein de l'OCDE et au-delà<BR>Cet article fourni une évaluation illustrative des impacts sur le PIB potentiel à des horizons de 5 et 10 ans de scénarios de réformes structurelles dans les domaines des marchés des produits et du travail, à partir de travaux empiriques de l’OCDE. Les résultats des simulations suggèrent qu’un alignement graduel des réglementations du marché des produits dans un large ensemble de secteurs non manufacturiers aux meilleurs pratiques pourrait augmenter la productivité agrégée du travail de plusieurs pour cent au cours de la prochaine décennie dans plusieurs pays de l’OCDE, et de plus de cinq pour cent au sein de la plupart des pays d’Europe continentale, ainsi que dans les BRIICS. Un relâchement de la législation sur la protection de l’emploi pourrait augmenter la croissance de la productivité d’un montant non négligeable dans plusieurs pays de l’OCDE et pays non OCDE membres du G20, bien que les effets estimés soient plus faibles que ceux attendus de réformes du marché des produits. Dans un scénario dans lequel elles seraient mises en oeuvre assez rapidement, les réformes du marché du travail dans les domaines des systèmes d’indemnisation chômage, de politiques d’activation, de fiscalité du travail et de systèmes de retraite pourraient augmenter les taux d’emploi de plusieurs points de pourcentage dans plusieurs pays de l’OCDE à un horizon de 10 ans sous un scénario de mise en oeuvre rapide. Le gain en PIB potentiel pour le pays moyen de l’OCDE d’une mise en oeuvre de l’ensemble des réformes considérées ici pourrait approcher 10 % à un horizon de 10 ans, indiquant la présence de gains substantiels liés aux réformes structurelles susceptibles de compenser les pertes définitives en PIB consécutives à la crise récente. |
| Keywords: | growth, productivity, employment, structural reforms, productivité, croissance, réforme structurelle, emploi |
| JEL: | E27 O43 |
| Date: | 2011–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:835-en&r=eff |
| By: | Hottenrott, Hanna; Thorwarth, Susanne |
| Abstract: | University research provides valuable inputs to industrial innovation. It is therefore not surprising that private sector firms increasingly seek direct access through funding public R&D. This development, however, spurred concerns about possible negative long-run effects on scientific performance. While previous research has mainly focused on a potential crowding-out of scientific publications through commercialization activities such as patenting or the formation of spin-off companies, we study the effects of direct funding from industry on professors' publication and patenting efforts. Our analysis of a sample of 678 professors at 46 higher education institutions in Germany shows that a higher share of industry funding of a professor's research budget results in a lower publication outcome both in terms of quantity and quality in subsequent years. For patents, we find that industry funding increases their quality measured by patent citations. -- |
| Keywords: | Scientist Productivity,University Research,Patents,Research Funding,Technology Transfer |
| JEL: | O31 O32 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10105&r=eff |
| By: | Yasusada Murata; Ryo Nakajima; Ryosuke Okamoto; Ryuichi Tamura |
| Abstract: | We develop a new approach to localized knowledge spillovers by incorporating the concept of control patents (Jaffe, Trajtenberg and Henderson 1993) into the distance-based test of localization (Duranton and Overman, 2005). Using microgeographic data, we identify localization distance while allowing for cross-boundary spillovers, unlike the existing literature where the extent of localized knowledge spillovers is detected at the state or metropolitan statistical area level. We revisit the recent debate by Thompson and Fox-Kean (2005) and Henderson, Jaffe and Trajtenberg (2005) on the existence of localized knowledge spillovers, and find solid evidence supporting localization, even when finer controls are used. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:tsu:tewpjp:2010-010&r=eff |
| By: | Robert Kollmann; Zeno Enders; Gernot J. Mueller |
| Abstract: | This paper incorporates a global bank into a two-country business-cycle model. The bank collects deposits from households and makes loans to entrepreneurs, in both countries. It has to finance a fraction of loans using equity. We investigate how such a bank capital requirement affects the international transmission of productivity and loan default shocks. Three findings emerge. First, the bank's capital requirement has little effect on the international transmission of productivity shocks. Second, the contribution of loan default shocks to business cycle fluctuations is negligible under normal economic conditions. Third, an exceptionally large loan loss originating in one country induces a sizeable and simultaneous decline in economic activity in both countries. This is particularly noteworthy, as the 2007–09 global financial crisis was characterized by large credit losses in the US and a simultaneous sharp output reduction in the U.S. and the euro Area. Our results thus suggest that global banks may have played an important role in the international transmission of the crisis. |
| Keywords: | Equity ; Bank capital ; Productivity ; Default (Finance) ; Loans |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:72&r=eff |
| By: | John Haltiwanger (University of Maryland, NBER, IZA); Stefano Scarpetta (OECD, IZA); Helena Schweiger (EBRD) |
| Abstract: | Somewhat surprisingly, cross-country empirical evidence (at least in the cross section) does not seem to support the predictions of standard models that economies with stricter regulations on hiring and firing should have a lower pace of job reallocation. One problem in exploring these issues empirically has been the difficulty of comparing countries on the basis of harmonised measures of job reallocation. A related problem is that there may be unobserved measurement or other factors accounting for differences in job reallocation across countries. This paper overcomes these challenges by using harmonised measures of job creation and destruction in a sample of 16 developed and emerging economies (including four transition economies), exploiting the country, industry and firm size dimensions. The analysis of variance in the paper shows that firm size effects are a dominant factor in accounting for the variation in the pace of job reallocation across country, industry and size cells. However, even after controlling for industry and size effects there remain significant differences in job flows across countries that could reflect differences in labour market regulations. We use the harmonised data to explore this hypothesis with a difference-in-difference approach. We find strong and robust evidence that stringent hiring and firing regulations tend to reduce the pace of job reallocation. |
| JEL: | O1 P2 P5 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ebd:wpaper:116&r=eff |
| By: | Concetta Castiglione (Department of Economics, Trinity College Dublin (Ireland)); Davide Infante (Department of Economics and Statistics, University of Calabria (Italy)); Janna Smirnova (Department of Economics and Statistics, University of Calabria (Italy)) |
| Abstract: | In response to recently growing literature investigating the relationship between environment and institutions, this study investigates how rule of law influences the level of income at the turning point of the Environmental Kuznets Curve (EKC). Using an alternative specification of EKC that avoids nonlinear transformation of potentially nonstationary regressors, investigated by Bradford et al. (2005) and Leitao (2010), we find the evidence for the EKC in European countries for carbon emissions. Our results find a negative relationship between pollution and rule of law, demonstrating that when rule of law is strong, the turning point of the EKC occurs at a lower level of income per capita, thus, decreasing emissions. In terms of policy implication, our study suggests that institutional reinforcement should deserve close attention in designing and enforcing policies that limit environmental degradation. |
| Keywords: | Environmental Kuznets Curve, Rule of law, Panel data, Turning point |
| JEL: | O43 Q53 Q58 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0111&r=eff |