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on Efficiency and Productivity |
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Issue of 2012‒12‒15
fifteen papers chosen by |
| By: | Subhash Ray (University of Connecticut) |
| Abstract: | Firms within a state, states within a country, and countries across the world are continuously striving to enhance their competitiveness in the present age of globalization. This paper defines competitiveness of a production unit as the relative cost of production per unit of output. Basic concepts from neoclassical production economics are used to provide a detailed decomposition of cost competitiveness of a firm relative to a rival. It is also shown how changes in efficiency and relative input prices along with technical change affect the evolution of cost competitiveness of a firm over time. State level data from the U.S. Census of Manufacturers from the years 1992, 1997, 2002, and 2007 are used in a empirical application of the proposed methodology using Data Envelopment Analysis. JEL Classification: C61, L25, O14 Key words: Data Envelopment Analysis, Cost Efficiency, Technical Change |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2012-39&r=eff |
| By: | Jean-Philippe Boussemart (University of Lille 3 and IESEG School of Management (LEM-CNRS)); Jean-Pierre Butault (INRA Paris and INRA Nancy); Oluwaseun Ojo (IESEG School of Management (LEM-CNRS)) |
| Keywords: | Index numbers, Total Factor Productivity, Factor income distribution, Agricultural and food policy |
| JEL: | C43 D24 D33 Q18 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e201215&r=eff |
| By: | Sébastien MARCHAND (Centre d'Etudes et de Recherches sur le Développement International); Huanxiu GUO |
| Abstract: | In this case study, we attempt to re-evaluate the performance of organic farming in developing countries using the indicator of Environmental Efficiency (EE) within the framework of Stochastic Frontier Analysis (SFA). A set of plot-season level panel data was collected from an NGO-led organic paddy rice project in southern China. This original dataset is used to calculate EE scores across both the organic and conventional plots. Our two-stage analysis reveals two essential points. First, in poor rural areas, organic farming doesn't systematically reduce the pure nitrogen input for paddy rice production. In order to maintain the yield, organic farmers may apply the same, or an even greater quantity of pure nitrogen than conventional farmers. Second, organic farming loses its environmental efficiency in the scaling up period due to the excessive pure nitrogen input. Therefore, we argue that beyond the simple substitution of chemical fertilizer by organic fertilizer, more sustainable organic farming necessitates additional e fforts on the control of nutrient input. |
| Keywords: | Organic farming, Environmental efficiency, Stochastic frontier analysis, China |
| JEL: | D71 O53 R15 Q57 Q12 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1410&r=eff |
| By: | Nin-Pratt, Alejandro; Johnson, Michael E.; Yu, Bingxin |
| Abstract: | The improved performance of the agricultural sector in Africa south of the Sahara during the most recent decade (2000–2010) has raised questions about the drivers behind the growth. Skeptics argue that rising commodity prices, as world markets experience a commodity boom, are the main cause of the agricultural growth. Others point to improvements in the policy environment and increased investments in agriculture at a time when African governments and donors have been rallying to increase their support to agriculture. Is African agriculture undergoing a new and sustained recovery after many decades of stagnant and volatile growth rates—or is it simply riding the current global commodity boom? We attempt to answer this question by analyzing the structure of overall agricultural growth in the past 30 years using a growth decomposition approach. Results show both good and bad news for future prospects of African agricultural growth. The good news is that a changing policy environment and increased attention to agriculture has had a major effect on overall productivity growth based on technical efficiency gains. The bad news is that most of this productivity growth is the result of countries recovering from the poor performance of the 1980s and 1990s together with favorable domestic prices. A key challenge for African countries in the years to come is to transform the current windfall gains from favorable high commodity prices and the one-time effects of policy reforms into sustainable growth based on technical change. |
| Keywords: | Agriculture, Agricultural growth, Agricultural productivity, growth accounting, economic growth, Commodities, Agricultural policies, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1224&r=eff |
| By: | Heikkilä, Anna-Maija; Myyrä, Sami; Pietola, Kyösti |
| Abstract: | In the long term, productivity and especially productivity growth are necessary conditions for the survival of a farm. In this paper, we focus on the technology choice of a dairy farm, i.e. the choice between a conventional and an automatic milking system. Our aim is to reveal the extent to which economic rationality explains investing in new technology. The adoption of robotics is further linked to farm productivity to show how capital-intensive technology has affected the overall productivity of milk production. In our empirical analysis, we apply a probit model and an extended Cobb-Douglastype production function to a Finnish farm-level dataset for the years 2000–10. The results show that very few economic factors on a dairy farm or in its economic environment can be identified to affect the switch to automatic milking. Existing machinery capital and investment allowances are among the significant factors. The results also indicate that the probability of investing in robotics responds elastically to a change in investment aids: an increase of 1% in aid would generate an increase of 2% in the probability of investing. Despite the presence of non-economic incentives, the switch to robotic milking is proven to promote productivity development on dairy farms. No productivity growth is observed on farms that keep conventional milking systems, whereas farms with robotic milking have a growth rate of 8.1% per year. The mean rate for farms that switch to robotic milking is 7.0% per year. The results show great progress in productivity growth, with the average of the sector at around 2% per year during the past two decades. In conclusion, investments in new technology as well as investment aids to boost investments are needed in low-productivity areas where investments in new technology still have great potential to increase productivity, and thus profitability and competitiveness, in the long run. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:142&r=eff |
| By: | Harashima, Taiji |
| Abstract: | In this paper, a theory of total factor productivity (TFP) that incorporates a model of intelligence is formulated and described. In particular, the fluid intelligence of ordinary workers is emphasized as an important element in TFP because such workers have the intelligence to innovate, even though their innovations are minor. Nevertheless, these innovations are essential for production because they solve many small but unexpected problems that ordinary workers must address. The TFP model is based on item response theory, which is widely used in psychology and psychometrics. TFP is assumed to be an increasing function of ordinary workers’ fluid intelligence, without which production is virtually impossible. Therefore, the model suggests that TFP is derived from the fruits of human intelligence. |
| Keywords: | Total factor productivity; Intelligence; Innovation; Item response theory; Experience curve effect |
| JEL: | O47 O15 O20 O31 D24 |
| Date: | 2012–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43151&r=eff |
| By: | Thomas P. Triebs; David S. Saal; Pablo Arocena; Subal C. Kumbhakar |
| Abstract: | Economies of scale and scope are typically modelled and estimated using cost functions that are common to all firms in an industry irrespective of whether they specialize in a single output or produce multiple outputs. We suggest an alternative flexible technology model that does not make this assumption and show how it can be estimated using standard parametric functions including the translog. The assumption of common technology is a special case of our model and is testable econometrically. Our application is for publicly owned US electric utilities. In our sample, we find evidence of economies of scale and vertical economies of scope. But the results do not support a common technology for integrated and specialized firms. In particular, our empirical results suggest that restricting the technology might result in biased estimates of economies ofscale and scope. |
| Keywords: | Economies of scale and scope, flexible technology, electric utilities, vertical integration, translog cost function |
| JEL: | D24 L25 L94 C51 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_142&r=eff |
| By: | Ragasa, Catherine; Kinwa-Muzinga, Annie; Ulimwengu, John M. |
| Abstract: | Based on the 2011 Global Hunger Index, the Democratic Republic of the Congo (DRC) has the most severe level of hunger and malnutrition. There is growing recognition that development in the agriculture sector and increasing productivity will be critical to reverse this trend. A growing set of literature looks at gender disparity in access to critical inputs, knowledge and markets, which have been shown to contribute to low productivity and nutrition insecurity. This assessment contributes to the knowledge gap by compiling existing empirical evidence and investigating the gender gaps in access to resources and opportunities in the agriculture and food sector in the DRC. |
| Keywords: | Gender, Nutrition, food security, Agricultural productivity, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1201&r=eff |
| By: | Giorgio Barba Navaretti (University of Milan and Centro Studi Luca d’Agliano); Davide Castellani (University of Perugia and Centro Studi Luca d’Agliano); Fabio Pieri (Universitat de València) |
| Abstract: | This paper provides new insights on the firm age and growth nexus along the entire distribution of (positive and negative) growth rates. Using data from the EFIGE survey, and adopting a quantile regression approach we uncover evidence for a sample of French, Italian and Spanish manufacturing firms in the period from 2001 to 2008. After controlling for several firms’ characteristics, country and sector specificities we find that: (i) young firms grow faster than old firms, especially in the highest growth quintiles (ii) young firms face the same probability of declining than their older counterparts; (iii) high growth is associated with younger CEOs and other attributes which capture the attitude of firm toward growth and change, i.e. the number of employees involved in R&D activities and the number of graduate employees; (iv) results are robust to the inclusion of other firms’ characteristics like labor productivity, capital intensity, and the financial structure. Overall, our results are consistent with several theoretical arguments, like love for risk and learning. |
| Keywords: | firm growth, age, quantile regression |
| JEL: | L21 L25 L26 L60 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1217&r=eff |
| By: | Ton Kwaak |
| Abstract: | Labour productivity differs significantly between small, medium-sized and large enterprises in the private enterprise sector. This holds both for the level of labour productivity as well as its development. Size-class differences regarding the level of labour productivity are only to a limited extent dependent on differences in sectoral structure. A model of the production structure has been developed and estimated to shed some light on these phenomena explaining various aspects of labour productivity of (average) small, medium-sized and large enterprises and applied to four economic sectors in Dutch private enterprise (in a separate paper (Kwaak, (2012), the model is tested for private enterprise as a hole). It should be stressed that the analysis refers to the 'representative' or average enterprise in the small, medium-sized or large enterprise segment of the economy; it does not refer to individual enterprises. |
| Date: | 2012–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h201215&r=eff |
| By: | Dey, Madan M.; Spielman David J.; Haque, A.B.M. Mahfuzul; Rahman, Md. Saidur; Valmonte-Santos, Rowena |
| Abstract: | Efforts to unlock the genetic potential of both rice and fish, when combined with efforts to improve the management of rice–fish systems, have considerable proven potential for increasing agricultural productivity and food security. In Bangladesh, estimates suggest that the country’s potential rice–fish production system encompasses between two and three million hectares of land. Despite three decades of research on biophysical and technical aspects of rice–fish systems, this potential has not been realized fully due to insufficient attention given to the social, economic, and policy dimensions of system improvement. This paper provides a characterization of the diverse and changing nature of rice–fish systems in Bangladesh by combining data from a novel upazilla-level (sub-district-level) survey of fishery officers with household surveys, focus group discussions, and a meta-review of the literature on aquaculture in the country. The resulting analysis sheds new light on the economic viability of different rice–fish systems and recommends policy and investment options to further improve the development and delivery of rice–fish technologies. Findings indicate that in addition to concurrent rice–fish systems, alternating rice–fish systems and collectively managed systems offer considerable potential for increasing productivity and farm incomes in Bangladesh. Findings also suggest that although the emergent innovation system around these rice–fish systems is fairly dynamic, there is a need for more supportive policies and investments—and analysis of the intended and unintended impacts of these policies and investments. |
| Keywords: | productivity, income, Policies, rice-fish systems, aquaculture, Household survey, Cereal Systems Initiative for South Asia (CSISA), |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1220&r=eff |
| By: | Wilko Bolt; David Humphrey |
| Abstract: | The three main measures of competition (HHI, Lerner Index, and H-Statistic) are uncorrelated for U.S. banks. We investigate why this occurs, propose a frontier measure of competition, and apply it to five major bank service lines using data only available since 2008. Fee-based banking services comprise 35% of bank revenues so assessing competition by service line is preferred to using a single measure for traditional activities extended to the entire bank. Academic-based competition measures explain only 1% of HHI variation. HHI merger/acquisition guidelines could be raised since current banking concentration seems unrelated to competition. |
| Keywords: | Competition; banks; frontier analysis |
| JEL: | L11 G21 C21 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:359&r=eff |
| By: | Michael C. Burda; Daniel S. Hamermesh; Jay Stewart |
| Abstract: | We examine monthly variation in weekly work hours using data for 2003-10 from the Current Population Survey (CPS) on hours/worker, from the Current Employment Survey (CES) on hours/job, and from the American Time Use Survey (ATUS) on both. The ATUS data minimize recall difficulties and constrain hours of work to accord with total available time. The ATUS hours/worker are less cyclical than the CPS series, but the hours/job are more cyclical than the CES series. We present alternative estimates of productivity based on ATUS data and find that it is more pro-cyclical than other productivity measures. |
| JEL: | E23 J22 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18603&r=eff |
| By: | Pfeifer, Christian (Leuphana University Lueneburg and IZA); Wagner, Joachim (Leuphana University Lueneburg, CESIS) |
| Abstract: | This empirical research note documents the relationship between composition of a firm's workforce (with a special focus on age and gender) and its performance with respect to innovative activities (outlays and employment in research and development (R&D)) for a large representative sample of enterprises from manufacturing industries in Germany using unique newly available data. We find that firms with a higher share of older workers have significantly lower proportions of R&D outlays in total revenues and of R&D employment in total employment, whereas firms with a higher share of female employment seem to be more active in R&D. |
| Keywords: | Ageing; firm performance; gender; Germany; innovation; R&D |
| JEL: | D22 D24 J21 J24 L25 |
| Date: | 2012–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0291&r=eff |
| By: | Nakano, Makoto; Nguyen, Pascal |
| Abstract: | We analyze the role of board age on firm performance using a large sample of Japanese firms. The results reveal the existence of a significant negative relationship. After controlling for endogeneity using firm size as instrument, the effect of board age is found to be more significant, consistent with the notion that older directors are more likely to retain (relinquish) their positions in strongly (poorly) performing firms. In addition, we show that the performance of younger and high-growth firms is more sensitive to board age, which points to a risk-based explanation. Indeed, it appears that older boards are more reluctant to take risks and particularly to undertake acquisitions. Overall, the results underline the disadvantage of (re)appointing older managers since the latter tend to be more conservative, perhaps because of their shorter decision horizons or greater vested interests. |
| Keywords: | board of directors, top management, decision making, risk aversion, performance |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hcfrwp:2&r=eff |