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on Efficiency and Productivity |
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Issue of 2016‒07‒09
sixteen papers chosen by |
| By: | James Uguccioni |
| Abstract: | Canadian railways are a vital part of the country’s transportation sector, moving goods and people across the country. We perform firm-level productivity analysis of Canadian freight railways for 1986 to 2009, focusing on the two railways which dominate the market: Canadian National (CN) and Canadian Pacific (CP). We obtain total factor productivity (TFP) estimates both by constructing productivity indices and by econometrically estimating cost functions. Driven in part by operational improvements, the strong TFP growth at both firms considerably outpaced aggregate TFP growth in Canada over the period of interest. This robust TFP growth, together with significant capital deepening, led to impressive labour productivity gains. We pay special attention to the productivity effects of the 1995 privatization of CN. While CN enjoyed much stronger productivity growth over the 1986-2009 period than CP, its performance was equally superior before and after the 1995 privatization. |
| Keywords: | Rail, Transport, Productivity, Transportation, Canada, Total Factor Productivity, Multifactor Productivity |
| JEL: | D22 D24 H32 J24 L92 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1608&r=eff |
| By: | Evan Capeluck |
| Abstract: | The objective of this report is to examine the impact of public policy on Australia’s productivity performance and to discuss possible lessons for Canada from this experience. To do this, the report conducts a comprehensive analysis of the productivity performance of both countries, with particular interest in determining which underlying factors can explain Australia’s superior productivity growth in recent years. In addition, the report discusses the literature on the effects of public policy on Australian productivity performance since the 1990s. |
| Keywords: | Productivity, Capital, Labour, Multifactor Productivity, Productivity Growth, Human Capital, Innovation, Investment, Australia, Canada, Regulation |
| JEL: | D24 N17 N37 N47 N12 N32 N42 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1607&r=eff |
| By: | Hiroshi Nishi |
| Abstract: | This study examines the sources and consequences of labour productivity growth dynamics in Japan (1970-2011) to investigate the extent to which Japanese economic performance has been affected by Baumol's growth and cost diseases. We find that although it is not as apparent in actual aggregate labour productivity dynamics, Baumol's growth disease lies behind the Japanese economy. In regard to Baumol's cost disease, the Japanese economy has undergone a change from productivity growth rate differential inflation to productivity growth rate differential deflation since the end of the 1990s. In other words, Baumol's cost disease appears atypically as deflation in the recent performance of the Japanese economy. |
| Keywords: | Baumol diseases;Productivity growth rate differential;Japanese economy |
| JEL: | L11 L16 O41 O47 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-16-003&r=eff |
| By: | He, Ming (Division of Economics, Xi'an Jiaotong-Liverpool University); Chen, Yang (Division of Economics, Xi'an Jiaotong-Liverpool University); Schramm, Ronald M. (Division of Economics, Xi'an Jiaotong-Liverpool University) |
| Abstract: | We use a spatial autoregressive model to study the determinants of firm-level productivity growth using longitudinal data on China's electric apparatus industry over the period of 1999-2007. Factors considered include technological spillover, R&D and export behavior, agglomeration economies, and public expenditure. We propose modifications to Kelejian and Prucha's (1998) FE-2SLS procedure and Mutl and Pfaffermayr's (2011) RE-FG2SLS procedure to cope with the technical difficulties with our unbalanced panel. Statistical evidence strongly favors the fixed effects model over the random effects model. According to our estimates, there are large and signiffcant technological spillovers among firms. Individually, firms benefit from their own R&D and export activities. Market competition and public expenditure in the local and neighboring jurisdictions are found to be important determinants to productivity. Our model also provides direct evidence that the technological spillover effects attenuate rapidly in spatial distance. Finally, the inter-regional spillover effects are found to be more pronounced and more significant on urban districts or jurisdictions with smaller geographical areas. Geographic proximity to neighbors and special administrative role jointly contribute to this observation. |
| Date: | 2016–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:xjt:rieiwp:2016-02&r=eff |
| By: | Zeng, Shuwei; Gould, Brian; Du, Xiaodong |
| Abstract: | Under the Federal Milk Marketing Order (FMMO) and California milk pricing systems, milk value is determined by the value of components that are important to the manufacture of dairy products such as cheddar cheese, butter, nonfat dry milk and dry whey. This implies that the value of 100 lbs of milk will differ across farms due to different solids composition, i.e., fat, protein and other solids. Milk composition can be managed by dairy farm operators via the choice of cow breed, the number of lactations to keep a cow in the herd, ration formulations, feeding management, cow comfort, etc. Given these milk valuation systems we represent the profit maximizing problem of producers a problem of maximizing profits from multiple products (i.e., milk components). The milk valuation system should be accounted for when examining dairy production efficiency. Previous analysis have typically use the total amount of milk produced as a measure of output, not the production of its components. In this paper, we use hedonic aggregate functions to generate an aggregate output index that implicitly incorporated in an input-oriented distance function. We employ data from the 2005 USDA Agricultural Resource Management Survey (ARMS)-Dairy Survey for this analysis. A unique feature of the 2005 survey is that it contains information on the total amount of milk components produced by each farms milking herd. From this analysis we find that the estimated technical efficiency has less variance, but larger range compared to the method using milk yield as output. A great share of producers have technical efficiency more than 0.9. |
| Keywords: | Quality adjustment productivity, Technical Efficiency, Dairy Production., Farm Management, Industrial Organization, Livestock Production/Industries, Production Economics, Productivity Analysis, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:237347&r=eff |
| By: | Christian Haas (University of Giessen); Karol Kempa (Frankfurt School of Finance and Management) |
| Abstract: | This paper uses a theoretical model with Directed Technical Change to analyse the observed heterogeneous energy intensity developments. Based on the empirical evidence on the underlying drivers of energy intensity developments, we decompose changes in aggregate energy intensity into structural changes in the economy (Sector Effect) and within-sector energy efficiency improvements (Efficiency Effect). We analyse how energy price growth and the relative productivity of both sectors affect the direction of research and hence the relative importance of the aforementioned two effects. The relative importance of these effects is determined by energy price growth and relative sector productivity that drive the direction of research. In economies that are relatively more advanced in sectors with low energy intensities, the Sector Effect dominates energy intensity dynamics given no or moderate energy price growth. In contrast, the Efficiency Effect dominates energy intensity developments in economies with a high relative technological level within their energy-intensive industries if moderate energy price growth is above a certain threshold. We further show that temporal energy price shocks might induce a permanent redirection of innovation activities towards sectors with low-energy intensities. |
| Keywords: | directed technical change, energy efficiency, energy intensity, structural change |
| JEL: | O33 Q43 Q55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201610&r=eff |
| By: | Enrique Moral-Benito (Banco de España) |
| Abstract: | It is a well-known empirical regularity that small firms are less productive than large firms. However, does size cause productivity or vice versa? Using matching methods, I find that productivity shocks are followed by significant increases in size defined by employment. In contrast, size shocks are not followed by productivity gains at the firm level. This finding casts doubt on the conventional wisdom that aggregate productivity in Spain is driven by a firm size distribution biased towards small firms in comparison with other developed countries. According to my findings, low firm-level productivity might play a crucial role in shaping the Spanish firm size distribution. |
| Keywords: | firm-level data, productivity, size distribution |
| JEL: | L11 L25 D24 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1613&r=eff |
| By: | Chang, Tom (University of Southern California); Graff Zivin, Joshua (University of California, San Diego); Gross, Tal (Columbia University); Neidell, Matthew (Columbia University) |
| Abstract: | We investigate the effect of pollution on worker productivity in the service sector by focusing on two call centers in China. Using precise measures of each worker's daily output linked to daily measures of pollution and meteorology, we find that higher levels of air pollution decrease worker productivity by reducing the number of calls that workers complete each day. These results manifest themselves at commonly found levels of pollution in major cities throughout the developing and developed world, suggesting that these types of effects are likely to apply broadly. When decomposing these effects, we find that the decreases in productivity are explained by increases in time spent on breaks rather than the duration of phone calls. To our knowledge, this is the first study to demonstrate that the negative impacts of pollution on productivity extend beyond physically demanding tasks to indoor, white-collar work. |
| Keywords: | pollution, productivity |
| JEL: | J22 J24 Q51 Q53 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10027&r=eff |
| By: | Hueth, Brent; Jang, Heesun |
| Keywords: | Industrial Organization, Productivity Analysis, |
| Date: | 2016–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:239254&r=eff |
| By: | Herzer, Dierk; Strulik, Holger |
| Abstract: | In this paper, we show, using a panel of developed countries, that there is a long-run negative association between church attendance and total factor productivity (TFP) with predictive causality running from declining church attendance to increasing factor productivity. According to our preferred estimate, about 18% of the increase in TFP from 1950 to 1990 is caused by declining religiosity. In order to explain this phenomenon, we integrate into standard R&D-based growth theory a micro-foundation of individual cognitive style, which is either intuitive-believing or reflective-analytical. Under the assumption that R&D productivity is positively influenced by a reflectiveanalytical cognitive style, we find that secularization leads to an increasing labor share in R&D and gradually increasing productivity growth. We use these insights to reflect on trends in religiosity and R&D-based growth in the very long run, from Enlightenment to the present day. |
| Keywords: | religiosity,church attendance,factor productivity,cognitive style,R&D-based growth |
| JEL: | N30 O11 C23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:284&r=eff |
| By: | Sean Dougherty; Octavio Escobar |
| Abstract: | Over the last decade, Mexico’s unit labour costs decreased relative to other emerging markets’, especially compared to China’s. This decrease boosted Mexico’s trade competitiveness, particularly in the manufacturing sector. However, Mexico’s increasing competitiveness masks one of the country’s fundamental concerns, which is the absence of productivity improvements. The aim of this paper is two-fold: first, we examine the evolution of total factor productivity in Mexico’s manufacturing sector, as compared to China’s. Firm-level data is employed to analyse the distribution and characteristics of productivity across Mexico’s regions. Second, using regional data for the period 2005–2012, we study the policy impediments behind sluggish productivity improvements, particularly to determine how labour informality may have contributed. The study takes advantage of Mexico’s heterogeneity across regions in terms of productivity, market regulation, financial constraints and firm size to identify economic policies that can help to boost productivity in the future. Le Mexique en phase de devenir la nouvelle Chine ? : Déterminants institutionnels de la compétitivité et de la productivité Au cours de la dernière décennie, les coûts unitaires du travail du Mexique ont diminué par rapport aux autres économies émergentes, en particulier par rapport à la Chine. Cette baisse a stimulé la compétitivité commerciale du Mexique, essentiellement dans le secteur manufacturier. Cependant, l’amélioration de la compétitivité semble masquer le principal problème mexicain, à savoir que cette dernière n’est pas accompagnée d’augmentation de la productivité. L’objectif de cet article est double: d'abord, nous examinons l'évolution de la productivité totale des facteurs dans le secteur manufacturier du Mexique, en comparaison avec la Chine. Les données utilisées sont recueillies au niveau des firmes, afin de pouvoir analyser la répartition et les caractéristiques de la productivité à travers les régions mexicaines. Deuxièmement, en utilisant les données régionales pour la période 2005–2012, nous étudions les obstacles politiques qui ont conduit à une stagnation de la productivité, en particulier pour déterminer dans quelle mesure l'informalité du travail pourrait y avoir contribué. Afin d’identifier les politiques économiques susceptibles de stimuler la productivité dans l'avenir, l'étude tire parti de l'hétérogénéité régionale en termes de productivité, du cadre réglementaire, des contraintes financières et de la taille des entreprises. |
| Keywords: | productivity, micro data, informality, allocative efficiency, sub-national policy analysis, productivité, micro-données, informalité |
| JEL: | E26 L25 O17 O43 O54 |
| Date: | 2016–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaac:4-en&r=eff |
| By: | Nicholas Kilimani (Department of Economics, University of Pretoria); Jan van Heerden (Department of Economics, University of Pretoria); Heinrich Bohlmann (Department of Economics, University of Pretoria); Louise Roos (Centre for Policy Studies, Victoria University, Melbourne) |
| Abstract: | Climate variability can affect economies directly through its impact on agricultural output, and indirectly, through its effect on the activities of down-stream industries and household welfare. This paper uses a Computable General Equilibrium model with a disaggregated agricultural sector to analyse the impact of a drought on the Ugandan economy. The losses were assessed with respect to GDP, agricultural output, employment, the trade balance and household consumption. The drought effects were shown to vary by sector. The fall in employment within the agricultural industries was less compared to the output losses. At a macro level, exports declined, while at a household level, the terms of trade gains mitigated part of the potential welfare losses thereby reducing consumption, but to a lesser degree. The findings indicate that a drought can cause substantial losses to the economy. The need for targeted interventions to mitigate such drought impacts is therefore critical. |
| Keywords: | computable general equilibrium modelling, drought, economic activity, Uganda |
| JEL: | D58 Q25 Q54 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201649&r=eff |
| By: | Joseph P. Hughes (Rutgers University); Loretta J. Mester (Federal Reserve Bank of Cleveland); Choon-Geol Moon (Hanyang University) |
| Abstract: | By eliminating the influence of statistical noise, stochastic frontier techniques permit the estimation of the best-practice value of a firm’s investment opportunities and the magnitude of a firm’s systematic failure to achieve its best-practice market value – a gauge of the magnitude of agency costs. These frontiers are estimated from the performance of all firms in the industry and, thus, capture best-practice performance that is, unlike Tobin’s q ratio, independent of the managerial decisions of any particular firm. Using the frontier measure of performance applied to 2007 data on top-tier, publicly traded U. S. bank holding companies, we obtain evidence on market discipline: we find that higher managerial ownership at most banks tends to align the interests of insiders with those of outside owners and to be associated with improved financial performance; at most banks, higher blockholder ownership is associated with improved financial performance obtained from blockholders’ monitoring; and, at most banks, higher product-market concentration is associated with poorer financial performance and the so-called managerial quiet life. Using the frontier measure of investment opportunities, we find evidence that banks with relatively higher-valued investment opportunities achieve less of their potential market value, while banks with lower-valued opportunities achieve more of their potential value. In spite of their lower-valued opportunities, these banks, on average, achieve the same Tobin’s q ratio and, thus, appear better able to exploit their less valuable investment opportunities. Our results suggest that higher-valued opportunities may reduce managers’ performance pressure and provide a stronger incentive to consume agency goods. |
| Keywords: | banking, efficiency, ownership structure, competition |
| JEL: | C58 G21 G28 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:201605&r=eff |
| By: | Etzo, Ivan; Massidda, Carla; Piras, Romano; Mattana, Paolo |
| Abstract: | This paper studies how immigrants impact on Italian economy. The issue is addressed following the channel output decomposition approach by means of which the effect of immigration is measured with respect to per capita value added and its components. The investigation is carried out at sector level during the 2008–2011 time period. The results show that the main channel through which migration impacts on value added varies on sectoral basis. While at aggregate level, in Manufacturing and in Other Services the impact goes mainly through capital intensity, in the Construction and in the Commerce sectors the principal channel is via total factor productivity. |
| Keywords: | channel output decomposition approach, immigrants. |
| JEL: | F22 F62 J61 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72300&r=eff |
| By: | Gianluigi Coppola (Dipartimento di Scienze Economiche e Statistiche - University of Salerno (ITALY)); Monica Gambino (NISEA - FISHERIES AND AQUACULTURE RESEARCH ORGANIZATION); Alfonso Pellecchia; Dario Pinello (NISEA - FISHERIES AND AQUACULTURE RESEARCH ORGANIZATION); Evelina Carmen Sabatella (NISEA - FISHERIES AND AQUACULTURE RESEARCH ORGANIZATION) |
| Abstract: | The Italian fleet is characterized by a low geographical concentrations and by strong differences in specialization, productivity and profitability between maritime regions and fleet segments. In this paper we try to test the differences in technology and in the level of economy of scale existing among the Italian fleet segments on the basis of the estimation of a translog Cost function (among others Pascoe, 2007; Eggert and Tveteras, 2007). It permits to measure the elasticity of substitution among factors, to assess if it is constant or not and also to estimate the level of economies of scale. The model was applied on a dataset of around 900 vessels; these vessels are part of the sample used within the Italian National Program under the Data Collection Framework to estimate the economic variables of the Italian fishing fleets. The sampling is of a stratified nature in that the fishing vessels of the fleet are divided into homogenous groups (fleet segment and maritime regions) Independent samples are taken from each of these clusters through a Probability Proportional to Size (PPS). The estimate of the value of capital invested in the sector derives from the application of the PIM methodology (Perpetual Inventory Method). The model was applied to the following two segments: trawlers and artisanal vessels. The results of the study mainly attest the existence of economy of scale in both 2 fleet segments. Language: en |
| Keywords: | : Capacity, Economies of Scale, Translog Cost Function |
| JEL: | Q22 D23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:irf:wpaper:017&r=eff |
| By: | Embaye, Weldensie; Bergtold, Jason; Schwab, Ben; Shanoyan, Aleksan |
| Keywords: | Farm Management, Labor and Human Capital, |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:239230&r=eff |