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on Efficiency and Productivity |
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Issue of 2017‒05‒07
eleven papers chosen by |
| By: | José-María Da-Rocha; Marina Mendes Tavares; Diego Restuccia |
| Abstract: | What accounts for differences in output per capita and total factor productivity (TFP) across countries? Empirical evidence points to resource misallocation across heterogeneous production units as an important factor. We study resource misallocation in a model where establishment-level productivity is endogenous and responds to the same policy distortions that create misallocation. In this framework, policy distortions not only misallocate resources across a given set of productive units (static effect), but also create disincentives for productivity improvement (dynamic effect) thereby affecting the productivity distribution and further contributing to lower aggregate output and productivity. The dynamic effect is substantial quantitatively. Reducing the dispersion in revenue productivity in the model by 25 percentage points to the level of the U.S. benchmark implies an increase in aggregate output and TFP by a factor of 2.9-fold. Improved resource allocation accounts for 42 percent of the gain, whereas the change in the productivity distribution accounts for the remaining 58 percent. |
| JEL: | E0 E1 O1 O4 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23339&r=eff |
| By: | Iftekhar HASAN (Gabelli School of Business, Fordham University); Jean-Loup SOULA (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | This paper generates an optimum bank liquidity creation benchmark by tracing an efficient frontier in liquidity creation (bank intermediation) and questions why some banks are more efficient than others in such activities. Evidence reveals that medium size banks are most correlated to efficient frontier. Small (large) banks - focused on traditional banking activities - are found to be the most (least) efficient in creating liquidity in on-balance sheet items whereas large banks – involved in non-traditional activities – are found to be most efficient in off-balance sheet liquidity creation. Additionally, the liquidity efficiency of small banks is more resilient during the 2007-2008 financial crisis relative to other banks. |
| Keywords: | banks, technical efficiency, liquidity creation, diversification |
| JEL: | G21 G28 G32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2017-08&r=eff |
| By: | Keita Kouramoudou (Faculty of Management, University of Tampere) |
| Abstract: | The negative role of corruption in the economies is strongly claimed in economic research. The fact that it undermines economic growth is beyond doubt. Still mixed evidences persist about how corruption reaches growth. This paper examines the effect of corruption on total factor productivity (TFP), also referred to as Solow residual, and assesses the impact related to the increase in tax rates on this effect. The motivation of this study is that volumes of research show that growth of output in a large extent results from growth in TFP. The results of the estimations unambiguously suggest that corruption, well as tax burden, has a negative effect on TFP. When both variables alongside with the lagged dependent variable are used for controlling TFP, the finding suggests that one-unit increase in corruption standard deviation is associated with a decrease of 0.01% in TFP, and the increase in tax burden in the same proportion leads to a decline in TFP of 0.13%. Furthermore, our findings highlight that, a tax rate increase would result an aggravation of the negative impact of corruption on TFP. These findings remain robust to the introduction of TFP determinant variables over alternative regressions. |
| Keywords: | Total factor productivity, Corruption, Tax evasion |
| JEL: | D73 O47 H26 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:tam:wpaper:1714&r=eff |
| By: | Broberg, Thomas (CERE and the Department of Economics, Umeå University); Egüez, Alejandro (CERE and the Department of Economics, Umeå University) |
| Abstract: | Institutional structures may cause considerable inefficiencies in the use of energy. In this paper, we investigate the energy efficiency of multi-dwelling buildings in Sweden to find out whether the type of ownership matters. More specifically, we investigate whether rental apartment buildings are less efficient than cooperative apartment buildings and whether public ownership has a negative impact on energy efficiency. A conceptual framework is presented to illustrate that such differences could be explained by the split incentive problem and deviations from profit maximizing interests. The empirical analysis is based on a unique dataset that combines data from energy performance certificates with ownership data on residential units. The results indicate that cooperative apartment buildings are significantly more energy efficient than buildings with rental apartments. The results also indicate that publicly owned buildings have lower energy performance than privately owned ones. |
| Keywords: | Energy efficiency; Energy performance certificates; Multi-dwelling buildings; Split incentives; Public versus private management; Profit satisficing |
| JEL: | Q41 Q48 |
| Date: | 2017–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2017_004&r=eff |
| By: | Fabiano Schivardi; Enrico Sette; Guido Tabellini |
| Abstract: | Do banks with low capital extend excessive credit to weak firms, and does this matter for aggregate efficiency? Using a unique data set that covers almost all bank-firm relationships in Italy in the period 2004-2013, we find that, during the Eurozone financial crisis: (i) Under-capitalized banks were less likely to cut credit to non-viable firms. (ii) Credit misallocation increased the failure rate of healthy firms and reduced the failure rate of non viable firms. (iii) Nevertheless, the adverse effects of credit misallocation on the growth rate of healthier firms were negligible, and so were the effects on TFP dispersion. This goes against previous in uential findings that, we argue, face serious identification problems. Thus, while banks with low capital can be an important source of aggregate inefficiency in the long run, their contribution to the severity of the great recession via capital misallocation was modest. Keywords: Bank capitalization, zombie lending, capital misallocation JEL classification number: D23, E24, G21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:600&r=eff |
| By: | Antoine Berthou (Banque de France); Emmanuel Dhyne (National Bank of Belgium); Matteo Bugamelli (Banca d’Italia); Ana-Maria Cazacu (Banca Nationala a României); Calin-Vlad Demian (European Central Bank); Péter Harasztosi (Magyar Nemzeti Bank); Tibor Lalinsky (National Bank of Slovakia, Research Department); Jaanika Meriküll (Eesti Pank); Filippo Oropallo (ISTAT); Ana Cristina Soares (Banco de Portugal) |
| Abstract: | This paper provides a new cross-country evaluation of competitiveness,focusing on the linkages between productivity and export performance among European economies. We use the information compiled in the Trade module of CompNet to establish new stylized facts regarding the joint distributions of the firm-level exports performance and productivity in a panel of 15 countries, 23 manufacturing sectors during the 2000’s. We confirm that exporters are more productive than non-exporters. However, this productivity premium is rising with the export experience of firms, with permanent exporters being much more productive than starters. At the intensive margin, we show that both the level and the growth of firm-level exports rise with firm productivity, and that the bulk of aggregate exports in each country are made by a small number of highly productive firms. Finally, we show that during the crisis, the growth of exports by high productive firms sustained the current account adjustment of European “stressed” economies. This last result confirms that the shape of the productivity distribution within each country can have important consequences from the point of view of the dynamics of aggregate trade patterns. |
| Keywords: | Firm-level exports, productivity, firm heterogeneity |
| JEL: | F10 F14 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:svk:wpaper:1041&r=eff |
| By: | Zhaohua Wang; Yi Li; Ke Wang; Zhimin Huang |
| Abstract: | There is widespread concern that environmental factor may not be playing a pivotal role in influencing the generation performance of solar photovoltaic (PV) plants. The aim of this paper is to provide a fair and impartial operational performance evaluation of solar PV power plants taking into account of the impacts of environmental factors from real field data. Stochastic frontier analysis (SFA) is used to attribute the impacts of environmental factors (temperature, cloud amount, elevation, wind speed and precipitation) on inputs (like insolation and daylight hours) of solar PV power plants; while data envelopment analysis (DEA) is used to compute the environment-adjusted operational efficiency of these plants. SFA is utilized in the adjustment process for its merit of separating statistical noise from the error term, and DEA is used for its advantage of capturing the interaction among multiple inputs and outputs in a scalar value. The empirical analysis shows that the average operational efficiency of 70 grid-connected solar PV power plants in the United States slightly declines after accounting the impacts of environmental factors and statistical noise. Finally, the results partially support the initial concern from the statistical perspective and temperature is found to be the most significant influencing environmental factor, while precipitation and wind speed show no significant influence on operational efficiency. Therefore, the necessity of accounting for the impacts of environmental factors in the performance evaluation of solar PV power plants should not be omitted. |
| Keywords: | Solar PV power plants; Environmental factors; Data envelopment analysis; Slacks; Stochastic frontier analysis |
| JEL: | Q54 Q40 |
| Date: | 2017–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:104&r=eff |
| By: | Robert Kulick |
| Abstract: | I estimate the price and productivity effects of horizontal mergers in the ready-mix concrete industry using plant and firm-level data from the US Census Bureau. Horizontal mergers involving plants in close proximity are associated with price increases and decreases in output, but also raise productivity at acquired plants. While there is a significant negative relationship between productivity and prices, the rate at which productivity reduces price is modest and the effects of increased market power are not offset. I then present several additional new results of policy interest. For example, mergers are only observed leading to price increases after the relaxation of antitrust standards in the mid-1980s; price increases following mergers are persistent but tend to become smaller over time; and, there is evidence That firms target plants charging below average prices for acquisition. Finally, I use a simple multinomial logit demand model to assess the effects of merger activity on total welfare. At acquired plants, the consumer and producer surplus effects approximately cancel out, but effects at acquiring plants and non-merging plants, where prices also rise, cause a substantial decrease in consumer surplus. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:17-38&r=eff |
| By: | Luna, Ivette; Hiratuka, Celio; Haddad Netto, Elias Youssef |
| Abstract: | This article aims to explore learning and selection effects of productivity change for three classes of firm’s sizes in Brazilian manufacturing and service sectors from 1996 to 2011. The methodology is based on the Price Equation. Our results support the international evidence about the weak intensity of the selection effect to explain aggregate productivity change for medium and large size firms. Small firms, however, are much more affected. Besides, size, measured by number of employees, appears to be a good proxy for capital intensity. There are as well signs that the learning effect is highly correlated with the economic cycle. |
| Keywords: | Productivity, innovation, evolutionary theory, productive structure |
| JEL: | D22 L11 L60 L80 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78208&r=eff |
| By: | Fernandez, Cristina; García, Roberto; Lopez-Garcia, Paloma; Marzinotto, Benedicta; Serafini, Roberta; Vanhala, Juuso; Wintr, Ladislav |
| Abstract: | This paper illustrates the main features of the Labour Module of the CompNet dataset which provides indicators of firm growth over the period 1995-2012 across 17 EU (13 euro area) countries and 9 macro-sectors. It also includes information on a large set of micro-aggregated characteristics of firms growing at different speed such as their financial position and labour and total factor productivity. The paper shows that during the Great Recession the share of shrinking firms sharply increased in countries under stress, while firm growth slowed down in non-stressed countries. In the former, the construction sector suffered the most, while in the latter manufacturing and services related to transportation and storage were mainly affected, possibly as a result of the trade collapse. While we find that, all else equal, more productive firms had a higher probability of growing, the process of productivity-enhancing reallocation was muted during the Great Recession. JEL Classification: J23, L11, L25 |
| Keywords: | cross-country analysis, firm growth, micro-aggregated data |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20172048&r=eff |
| By: | Ana Fontoura Gouveia (Ministry of Finance, Portugal); Sílvia Santos (Banco de Portugal); Inês Gonçalves (Instituto Nacional de Estatística) |
| Abstract: | In recent years, literature has linked structural reforms with productivity growth. Considering Portugal’s recent comprehensive reform agenda, this topic acquires particular relevance. Using data for Portuguese firms for the period 2006-2014, this paper assesses the impact of structural reforms on firms’ productivity. In line with existing literature, the analysis shows that most reforms entail long-term gains, despite, in some reform areas, the existence of short-term costs. In general, there are important differences across reform areas and across firms, namely when comparing firms with different productivity levels. The firms’ distance to the technological frontier mediates the impact of reforms, either by potentiating its effects or by curbing them, depending on the reform area. |
| Keywords: | Distance to frontier, Growth, Structural reforms, Total Factor Productivity |
| JEL: | D04 D22 D24 O33 |
| Date: | 2017–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaac:8-en&r=eff |