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on Efficiency and Productivity |
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Issue of 2011‒07‒13
nineteen papers chosen by |
| By: | Ricardo de Avillez; Chris Ross |
| Abstract: | This report, based on the CSLS Provincial Productivity Database, provides a portrait of the productivity performance of the ten Canadian provinces over the 1997-2007 period. Level and growth rate estimates of labour and multifactor productivity are presented and discussed, with an emphasis on the provinces’ market sector. Two-digit NAICS industry level estimates are also presented. Capitalintensity and labour quality figures are also provided, and a standard growth accounting framework is used to determine the sources of labour productivity growth, as well as the sources of labour productivity level gaps between Canada and the provinces. |
| Keywords: | labour productivity, multifactor productivity, capital intensity, labour quality, Canadian provinces, growth accounting |
| JEL: | D24 J24 O47 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1103&r=eff |
| By: | Cheng, Gang; Qian, Zhenhua |
| Abstract: | Directional distance function is the generalization of radial model in data envelopment analysis. It has the capacity of dealing with undesirable outputs, but the problem is that it has no unit-invariant measurement of efficiency, which hampers its application to empirical studies. Data normalization for data envelopment analysis is a universal solution for the problem of unit-invariance, and the efficiency keeps unchanged in radial and non-radial models after data normalization. A unit-invariant efficiency measure for directional distance function is developed based on DEA data normalization. |
| Keywords: | Data Envelopment Analysis; Data Normalization; Units Invariance; Directional Distance Function |
| JEL: | C6 |
| Date: | 2011–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31995&r=eff |
| By: | Álvaro Escribano (Universidad Carlos III de Madrid); Rodolfo Stucchi (Inter-American Development Bank) |
| Abstract: | After facing more than a decade of price stability and economic growth, Spain is experiencing now one of the most significant slowdowns in economic activity across EU economies. There is a general consensus the severity of this slowdown is due to the low level and low rates of growth experienced by total factor productivity (TFP) during more than a decade. Using firm-level data over the period 1991-2005 we study the effect of recessions on the productivity growth of firms with different level of productivity (i.e., technological leaders and technological followers) and we find that firms tend to converge in recessions. In expansions, on the other hand, we find higher persistence in terms of productivity and no convergence. These findings are consistent with the predictions of technological diffusion models and the fact that firm’s innovation is procyclical. We also find that human capital and innovation are key factors that could enhance the productivity of Spanish manufacturing firms. |
| Keywords: | productivity catching up; technology diffusion; pro-cyclical innovation; technological leaders; business cycle |
| JEL: | C23 C52 D24 L16 L60 |
| Date: | 2011–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2011-10&r=eff |
| By: | Asker, John; Collard-Wexler, Allan; De Loecker, Jan |
| Abstract: | We investigate the role of dynamic production inputs and their associated adjustment costs in shaping the dispersion of total factor productivity (TFP) and static measures of capital misallocation within a country. Using data on 5,010 establishments in 33 developing countries from the World Bank’s Enterprise Research Data, we find that countries exhibiting greater time-series volatility of productivity are also characterized by greater cross-sectional dispersion in productivity. Volatility in TFP explains one quarter to one third of cross-country productivity dispersion. We document a similar relationship between productivity volatility and the dispersion of the marginal revenue product of capital (static capital misallocation). We then use a standard model of investment with adjustment costs, parameterized using numbers calibrated to U.S. data, to show that increasing the volatility of productivity to the level observed in these developing economies can quantitatively replicate the observed relationship between static misallocation and volatility observed in the data. We find that sixty-one percent of the static capital misallocation in the data is captured by the model’s prediction. Our findings suggest that the dynamic process governing productivity shocks is a first-order determinant of differences in misallocation and, hence, income across countries. |
| Keywords: | misallocation; productivity |
| JEL: | D2 L1 O1 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8469&r=eff |
| By: | Ari Hyytinen; Mika Maliranta |
| Abstract: | This paper studies how firms contribute to the productivity growth of an industry over their lifecycle. We present a decomposition method that allows us to condition the components of productivity growth on the age of production units. We find evidence for a prolonged positive exit effect that mirrors market selection during the early stages of firms’ lifecycle. This effect is tightly related to the negative initial productivity effect of entry. We also find some evidence that productivity-enhancing reallocation of resources between firms is concentrated on the middle aged firms. |
| Keywords: | productivity, decomposition, lifecycle, entry, exit |
| JEL: | O12 O14 O47 |
| Date: | 2011–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1253&r=eff |
| By: | Allan Collard-Wexler; John Asker; Jan De Loecker |
| Abstract: | We investigate the role of dynamic production inputs and their associated adjustment costs in shaping the dispersion of total factor productivity (TFP) and static measures of capital misallocation within a country. Using data on 5,010 establishments in 33 developing countries from the World Bank’s Enterprise Research Data, we find that countries exhibiting greater time-series volatility of productivity are also characterized by greater cross-sectional dispersion in productivity. Volatility in TFP explains one quarter to one third of cross-country productivity dispersion. We document a similar relationship between productivity volatility and the dispersion of the marginal revenue product of capital (static capital misallocation). We then use a standard model of investment with adjustment costs, parameterized using numbers calibrated to U.S. data, to show that increasing the volatility of productivity to the level observed in these developing economies can quantitatively replicate the observed relationship between static misallocation and volatility observed in the data. We find that sixty-one percent of the static capital misallocation in the data is captured by the model’s prediction. Our findings suggest that the dynamic process governing productivity shocks is a first-order determinant of differences in misallocation and, hence, income across countries. |
| JEL: | D24 L2 O47 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17175&r=eff |
| By: | Caldeirinha, V. M. |
| Abstract: | The Iberian ports can be characterized in different types regarding the type of specialization, bulk cargo or general cargo, and size as determinants of efficiency. Focus is made on the gaps of literature about port efficiency regarding size and specialization. Data envelopment analysis (DEA) methodology is used. Conclusion about the existence of 5 port groups recurring to size and specialization variables, with significant different characteristics and performance. |
| Keywords: | Port; Performance; Determinants |
| JEL: | M21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31957&r=eff |
| By: | Crafts, Nicholas (University of Warwick) |
| Abstract: | This paper examines the role of competition in productivity performance in Britain over the period from the late-nineteenth to the early twenty-first century. A detailed review of the evidence suggests that the weakness of competition from the 1930s to the 1970s undermined productivity growth but since the 1970s stronger competition has been a key ingredient in ending relative economic decline. The productivity implications of the retreat from competition resulted in large part from interactions with idiosyncratic British institutional structures in terms of corporate governance and industrial relations. This account extends familiar insights from cliometrics both analytically and chronologically. |
| Keywords: | competition; productivity; relative economic decline |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:42&r=eff |
| By: | Alexander Vogel (Leuphana University Lüneburg, Institute of Economics, Germany); Joachim Wagner (Leuphana University Lüneburg, Institute of Economics, Germany) |
| Abstract: | A large and growing number of micro-econometric studies show that exporting firms are more productive than firms that sell their products on the home market only. This so-called exporter productivity premium qualifies as a stylized fact. Only recently researchers started to look at the role of extreme observations, or outliers, in shaping these findings. These studies use micro-econometric methods that are robust against outliers to show that very small shares of firms with extreme values drive the result. The large exporter productivity premium found for samples of firms including outliers are dramatically smaller in samples without these extreme observations. Evidence on this, however, is limited so far to firms from manufacturing industries. This note adds comparable evidence for firms from the business services industries. We find that the estimated exporter productivity premium is statistically significant and relevant from an economic point of view when a standard fixed effects estimator is used to control for unobserved firm characteristics, but that it drops to zero when a robust estimator is applied. |
| Keywords: | Exporter productivity premium, services firms, robust estimation, panel data |
| JEL: | F14 C23 C81 C87 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:207&r=eff |
| By: | Cheng, Gang; Qian, Zhenhua; Zervopoulos, Panagiotis |
| Abstract: | The super-efficiency (SE) model is identical to the standard model, except that the unit under evaluation is excluded from the reference set. This model has been used in ranking efficient units, identifying outliers, sensitivity and stability analysis, measuring productivity changes, and solving two-player games. Under the assumption of variable, non-increasing and non-decreasing returns to scale (VRS, NIRS, NDRS), the SE model may be infeasible for some efficient DMUs. Based on the necessary and sufficient conditions for the infeasibility of SE, in the current paper, we have developed a DEA model with generalized orientation to overcome infeasibility issues. The DEA model with generalized orientation extends the orientation of the DEA model from the traditional input-orientation and output-orientation to the modified input-orientation, input-prioritized non-orientation, modified output-orientation, and output-prioritized non-orientation. All of the extended orientations are always feasible in the associated super-efficiency models. In addition, the modified input-oriented and the modified output-oriented approaches are developed to deal with the problem of infeasibility in super-efficiency models while keeping the concordance with the traditional oriented models. The newly developed model is illustrated with a real world dataset. |
| Keywords: | Data envelopment analysis (DEA); Super-efficiency (SE); Infeasibility; Orientation |
| JEL: | C02 C61 C67 |
| Date: | 2011–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31991&r=eff |
| By: | Andrew Sharpe; Alexander Murray |
| Abstract: | Canada's labour productivity performance has been abysmal since 2000, both relative to our historical experience and to that in the United States. In theory, a deterioration of the health status of Canadian workers could explain slower productivity growth. However, the evidence does not support this hypothesis. Nevertheless, there is no doubt that illness and disability impose a massive indirect economic burden on the Canadian economy because many persons of working age are unable to work. Canada's potential level of "social productivity" is lower because of this situation. This is an output shortfall issue, not a conventional productivity issue, and it is important not to confuse the two. |
| Keywords: | labour productivity, health status, absenteeism, presenteeism, Canada |
| JEL: | I12 J24 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1104&r=eff |
| By: | A. SCHREIBER (Direction générale de ladministration et de la fonction publique); A. VICARD (Insee) |
| Abstract: | In France, as in many industrialized countries, labor productivity experienced a slowdown over the past three decades: labor productivity per capita increased by 2.6% per year from 1979 to 1989, by 1.9% from 1990 to 1999 and by 1.0% per year from 2000 to 2008. Meanwhile, tertiarisation went on. Since 1978, 150,000 jobs were created on average each year in the services sector, while 60,000 were destroyed in manufacturing. The service sector is often presented as one major factor behind the slowdown in productivity. We show however that this is not the main driving factor. According to our decomposition, if the share of each sector in the total employment had remained the same from 1978 to 2008, annual average labor productivity gains would have been at a level of 2.0%. Instead, they were actually at 1.9%, a level only slightly lower. The slowdown is in fact driven by the evolution within the major sectors (agriculture, market services, construction, and to a lesser extent, manufacturing) and their sub-branches, especially between the 1990s and 2000s. Annual average productivity gains were reduced by 3.7 percentage points in agriculture between the two decades, by 0.8 percentage points in manufacturing, by 0.3 percentage points in services and by 2.0 points in construction. |
| Keywords: | Labor productivity, tertiarisation, deindustrialisation, structural change |
| JEL: | E23 E24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpdeee:g2011-10&r=eff |
| By: | Temel, Tugrul |
| Abstract: | This study examines the relationship between farm size and productivity in U.S. agriculture during 1982-92. A nonparametric regression method is applied to detect ex-post geographical patterns in changes in farm size and productivity. The estimations show that (i) in 1982 productivity per acre was high in the East, West, and South, modest in the middle part of the U.S., and low in the North, and this pattern remained the same during 1987-92, while the level of productivity continously increased over time; (ii) during 1982-92 farm size remained unchanged, large farms in the middle belt stretching from North to South and small ones in the East, West and South; and nally (iii) during 1982-92 an inverse relationship grew stronger between farm size and productivity. Furthermore, with the application of Markov chains approach, we projected the above patterns into the future. The ndings suggest: (i) farms are likely to experience ower productivity; (ii) small and large farms are likely to coexist as medium-sized farms to vanish; and (iii) the inverse relationship is likely to show a strong geographical pattern. |
| Keywords: | farm size; productivity; geography; inverse relationship; U.S. agriculture; nonparametric regression; Markov chains. |
| JEL: | C14 Q15 Q01 Q12 R14 Q18 |
| Date: | 2011–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31920&r=eff |
| By: | Bronwyn H. Hall |
| Abstract: | What do we know about the relationship between innovation and productivity among firms? The workhorse model of this relationship is presented and the implications of analysis using this model and the usually available data on product and process innovation are derived. The recent empirical evidence on the relationship between innovation and productivity in firms is then surveyed. The conclusion is that there are substantial positive impacts of product innovation on revenue productivity, but that the impact of process innovation is more ambiguous, suggesting some market power on the part of the firms being analyzed. |
| JEL: | O30 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17178&r=eff |
| By: | Nassul S. Kabunga (Georg-August-University Göttingen); Thomas Dubois (International Institute of Tropical Agriculture (IITA)); Matin Qaim (Georg-August-University Göttingen) |
| Abstract: | We analyze yield effects of tissue culture (TC) banana technology in the Kenyan small farm sector, using recent survey data and an endogenous switching regression approach. TC banana plantlets, which are free from pests and diseases, have been introduced in East Africa since the late-1990s. While field experiments show significant yield advantages over traditional banana suckers, a rigorous assessment of impacts in farmers’ fields is still outstanding. A comparison of mean yield levels between TC adopters and non-adopters in our sample shows no significant difference. However, we find a negative selection bias, indicating that farmers with lower than average yields are more likely to adopt TC. Controlling for this bias results in a positive and significant TC net yield gain of 7%. We also find that TC technology is more knowledge-intensive and more responsive to irrigation than traditional bananas. Simulations show that improving access to irrigation could lift TC productivity gains to above 20%. The analytical approach developed and applied here may also be useful for the evaluation of other knowledge-intensive package technologies and innovations in perennial crops. |
| Keywords: | Biotechnology; adoption; productivity; impact; endogenous switching regression; Kenya |
| Date: | 2011–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:082&r=eff |
| By: | Youssouf Kiendrebeogo (GED, Université Montesquieu Bordeaux IV) |
| Abstract: | In this paper we address the issue of access to drinking water in rural areas related to the productivity of the agricultural workforce. Considering an agricultural household model as our basic conceptual framework, we analyze the theoretical aspects of increasing the access rate to drinking water on the productivity of the agricultural workforce. First, we show that the increased access rate to drinking water is conducive to agricultural productivity due to increased intrinsic productivity of individuals and additional gain in time for agricultural production. Second, it comes out that the constraints on the access to drinking water may be costly costs in terms of decreased productivity and well-being of rural people. Moreover, the results of econometric estimates do not reject our theoretical implications. On a sample of 27 African countries, these results show mainly that access to clean water improves agricultural productivity. This positive effect is reinforced by the presence of a better sanitation system, even after controlling for country-specific effects and for the characteristics of rural areas. Nous abordons la question de l’accès à l’eau potable en milieu rural en relation avec la productivité de la main d’œuvre agricole. Sur la base du cadre d’analyse des ménages agricoles, nous analysons les aspects théoriques des effets d’un accroissement du taux d’accès à l’eau potable sur la productivité de la main d’œuvre agricole. En premier lieu, nous montrons qu'une augmentation du taux d'accès à l’eau potable est propice à la productivité agricole du fait de l'accroissement de la productivité intrinsèque des individus et du gain additionnel de temps pour la production agricole. D’autre part, il ressort que les contraintes d’accès à l’eau potable sont susceptibles d’imposer des coûts en termes de baisse de productivité et de bien-être aux populations rurales. En outre, les résultats économétriques ne rejettent pas ces arguments théoriques. Sur un échantillon de 27 pays africains, ces résultats montrent principalement que l’accès à l’eau potable améliore la productivité agricole. Cet effet favorable est renforcé par la présence d’un meilleur système d’assainissement, même après avoir contrôlé pour les effets spécifiques pays ainsi que pour les caractéristiques du milieu rural.(Full text in english) |
| JEL: | Q12 Q52 Q53 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:mon:ceddtr:165&r=eff |
| By: | Diego Restuccia |
| Abstract: | By international standards, gross domestic product (GDP) per capita in Latin America is low: around one fourth of that of the United States. Moreover, in the last five decades, Latin America has failed to catch-up in wealth to the level of the United States while other countries at similar or even lower stages of development have been successful. The failure to attain higher levels of relative income represents what I call the development problem in Latin America. Using a development accounting framework, I find that the bulk of the difference in GDP per capita between Latin America and the United States is accounted for by low GDP per hour and, in particular, low total factor productivity (TFP) in Latin America. I calculate that to explain the difference in GDP per hour, TFP in Latin America must be around 60 percent of that in the United States. I then consider a model with heterogeneous production units where institutions and policy distortions lead to a 60 percent productivity ratio between Latin America and the United States. Removing the barriers to productivity can increase long-run GDP per hour in Latin America by a factor of 4 relative to that of the United States. This increase is equivalent to 70-years worth of U.S. post WW-II development. |
| Keywords: | labor productivity, capital, schooling, establishment heterogeneity, policy distortions |
| JEL: | O1 |
| Date: | 2011–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-432&r=eff |
| By: | Diego Restuccia; Guillaume Vandenbroucke |
| Abstract: | Consider the following facts. In 1950 the richest ten-percent of countries attained an average of 8.1 years of schooling whereas the poorest ten-percent of countries attained 1.3 years, a 6-fold difference. By 2005, the difference in schooling declined to 2-fold. The fact is that schooling has increased faster in poor than in rich countries even though the per-capita income gap has generally not decreased. What explains educational attainment across countries and their evolution over time? We develop a model of human capital accumulation that emphasizes productivity and life expectancy differences across countries and time. Calibrating the parameters of the model to reproduce historical data for the United States, we find that the model accounts for 95 percent of the difference in schooling levels between rich and poor countries in 1950 and 78 percent of the increase in schooling over time in poor countries. The model generates a faster increase in schooling in poor than in rich economies even when their income gap does not decrease. These results have important implications for educational policy. |
| Keywords: | Educational attainment, productivity, life expectancy, education policy, labor supply. |
| JEL: | O1 O4 E24 J22 J24 |
| Date: | 2011–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-433&r=eff |
| By: | Valentin Zelenyuk (CEPA - School of Economics, The University of Queensland) |
| Abstract: | In this article we show equivalence between the input oriented and output oriented scale elasticity measures for multi-output, multi-input technologies. We show the necessary and sufficient condition for this equivalence. We also provide a Lagrange multiplier (or shadow price) interpretation of the scale elasticity measure. |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqcepa:65&r=eff |