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on Efficiency and Productivity |
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Issue of 2021‒11‒29
28 papers chosen by |
| By: | Paul Bouche; Gilbert Cette; Rémy Lecat |
| Abstract: | Analysing French firms over 1991-2016, we find first that since the beginning of the century, one or two downward significant productivity breaks have occurred in all industries, both at the frontier and for laggard firms, suggesting a decline in the contribution of technological progress to productivity growth. Second, the median labour share is always higher for the laggard firms than for the frontier firms, with a sharp decrease from the mid-1990s to 2008, and an increase from 2008 onwards. Third, factor reallocation decreased significantly in the 2000s, at the time when we observed an increase in productivity dispersion, with a growing productivity gap between frontier and laggard firms. It appears also that reallocation has been lower on average over the whole period for sectors with a high import share, which can be related to the impact of global value chains. |
| Keywords: | Productivity, Frontier Firms, Reallocation |
| JEL: | D24 E24 J23 L25 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:846&r= |
| By: | Arnaud Abad (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); P Ravelojaona (UPVD - Université de Perpignan Via Domitia); Z Shen (BIT - Beijing Institute of Technology) |
| Abstract: | As an important economic measure, the total factor productivity indices can be employed to evaluate the performance of decision-making units over time. These indices are usually based on multiplicative or additive distance functions estimated by both parametric and non parametric approaches. Under a non parametric analytic framework, this paper introduces a multiplicative directional productivity measure: the Directional Hicks-Moorstens (DHM) indicator. A dynamical combination of multiplicative directional distance functions is introduced and non convex production technologies are assumed to estimate distance functions. In empirical analysis, the proposed model is applied to investigate productivity changes among Chinese provincial public hospitals over the period 2014-2018. The results indicate that a consistent outcome is obtained under the multiplicative technology and the production technology of free disposal hull while more productivity gains are observed under free disposal hull technology. |
| Keywords: | Chinese medical institutions,Dynamical Deviation,Efficiency Index,Non Convexity,Total Factor Productivity C61 |
| Date: | 2021–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03419905&r= |
| By: | Hamsa, K.R.; Umesh, K.B. |
| Keywords: | Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315862&r= |
| By: | Ajayi, V.; Anaya, K.; Pollitt, M .G. |
| Abstract: | We analyse the productivity growth of electricity transmission and distribution networks in Great Britain and how changes in incentive mechanism have influenced the measured total factor productivity (TFP). In doing so we are also concerned to examine the effects of quality of service and environmental targets on measured productivity growth. It is increasingly important that productivity measures adjust for the increasing regulatory pressure to reduce the wider societal impacts of the electricity sector and improve quality of service. Failure to do so, may mean that productivity growth may look slower than it actually is. We employ a DEA technique which considers the underlying data without a stochastic element. Our findings show that productivity growth is consistently low for the period we examine, in the region of 1% p.a. over the 29 years from 1990/1991-2018/2019. For both electricity transmission and electricity distribution we try to monetise a wider range of quality and emissions variables in order to show the difference their inclusion makes to measured productivity growth. We show that it can make a difference both positively and negatively, though often this difference is small (e.g. 0.1% p.a.). However, the impact can be much larger (c. 1% p.a.), especially with respect to improvements in quality of service in the distribution network. In the context of generally slow productivity growth, we therefore show the importance of appropriate measurement. |
| Keywords: | Total factor productivity, incentive regulation, electricity networks, emissions |
| JEL: | D24 H23 L43 L94 |
| Date: | 2021–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2181&r= |
| By: | Pröll, Simon; Salhofer, Klaus; Eder, Andreas |
| Keywords: | Productivity Analysis, Crop Production/Industries |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315384&r= |
| By: | Victor Ajai (Energy Policy Research Group, Judge Business School, University of Cambridge); Karim Anaya (Energy Policy Research Group, Judge Business School, University of Cambridge); Michael Pollit (Energy Policy Research Group, Judge Business School, University of Cambridge) |
| Keywords: | Total factor productivity, incentive regulation, electricity networks, emissions |
| JEL: | D24 H23 L43 L94 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:anj:wpaper:012&r= |
| By: | Bruno Morando (Department of Economics, Trinity College Dublin); Carol Newman (Department of Economics, Trinity College Dublin) |
| Abstract: | Resource misallocation has been identified as an important source of aggregate productivity loss, yet to date there is a notable dearth of studies exploring the nature and extent of misallocation in the agricultural sector, despite the fact that it continues to receive significant government supports. In this paper, we analyse resource misallocation in the agricultural sector of the European Union with the aim of quantifying the impact of capital misallocation on aggregate productivity and disentangling its sources. We find that misallocation contributed to a 30 percent loss in productivity in the sector between 2001 and 2010. We can attribute about one third of this loss to distortionary government subsidies which disproportionately benefit relatively less productive farms. We find no evidence that the decoupling reform of the CAP in the mid-2000s reduced the distortionary effect of CAP subsidies on the allocation of capital. Our results provide an important benchmark for understanding misallocation in the context of a modern developed agricultural sector and other industries that benefit from potentially distortionary government supports. |
| Keywords: | Resource misallocation, productivity, subsidies, agriculture |
| JEL: | D22 D24 O13 Q12 Q18 Q28 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0221&r= |
| By: | Guohua Feng; Jiti Gao; Bin Peng |
| Abstract: | Despite its paramount importance in the empirical growth literature, productivity convergence analysis has three problems that have yet to be resolved: (1) little attempt has been made to explore the hierarchical structure of industry-level datasets; (2) industry-level technology heterogeneity has largely been ignored; and (3) cross-sectional dependence has rarely been allowed for. This paper aims to address these three problems within a hierarchical panel data framework. We propose an estimation procedure and then derive the corresponding asymptotic theory. Finally, we apply the framework to a dataset of 23 manufacturing industries from a wide range of countries over the period 1963-2018. Our results show that both the manufacturing industry as a whole and individual manufacturing industries at the ISIC two-digit level exhibit strong conditional convergence in labour productivity, but not unconditional convergence. In addition, our results show that both global and industry-specific shocks are important in explaining the convergence behaviours of the manufacturing industries. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2111.00449&r= |
| By: | Florian Dorn |
| Abstract: | Politicians are expected to influence policy outcomes in a way to gain electoral advantage. There is, however, a pending question whether efficiency in the provision of public goods and services is affected by strategic behavior. I examine how electoral cycles influence local government efficiency by using OLS fixed effects, event study, and instrumental variable estimations in a large balanced panel of around 2,000 municipalities in the German state of Bavaria. Cost efficiency is estimated by employing a fixed effects semi-parametric stochastic frontier analysis. The results show that electoral cycles increase government efficiency in election and pre-election years by around 0.75– 0.85 %. The effect is larger when executive and council electoral cycles coincide, and when incumbent mayors run for office again. My findings suggest an efficiencyenhancing effect of elections at given institutional conditions. |
| Keywords: | Electoral cycle, efficiency, local government, panel data, event study, stochastic frontier analysis (sfa), instrumental variables |
| JEL: | C14 C23 C26 D72 D73 H41 H70 H72 R15 R50 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_363&r= |
| By: | Zheng, Hongyun; Ma, Wanglin; Zhou, Xiaoshi |
| Keywords: | Land Economics/Use, Productivity Analysis |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315084&r= |
| By: | Nigel Driffield (Warwick Business School, University of Warwick, Enterprise Research Centre); Katiuscia Lavaratori (Henley Business School, University of Reading); Yama Temouri (Warwick Business School, University of Warwick, Enterprise Research Centre) |
| Keywords: | inward investment, productivity, foreign direct investment |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:anj:wpaper:014&r= |
| By: | Christophe André; Mathilde Pak |
| Abstract: | Regional inequality has increased in Sweden over the past decades, albeit from a low level. While redistribution and other public policies can narrow regional gaps in income, well-being and access to services, productivity growth is key to maintaining economic dynamism, creating job opportunities and attracting and retaining skilled workers. Against this background, this paper documents the performance of Swedish large regions (TL2) on the main productivity drivers identified by the literature. Panel regressions on a dataset covering up to 125 OECD regions in 17 countries identify the factors associated with high regional productivity, namely rail and road connectivity, knowledge-intensive employment and research and education. Investment in construction and finance is linked to somewhat weaker productivity. Even after taking these factors into account, the Stockholm region benefits from a sizeable productivity advantage, which likely reflects agglomeration effects. |
| Keywords: | Productivity, Regional development, Regional economic activity, Regional Studies, Sweden |
| JEL: | O47 P48 R11 R12 R58 |
| Date: | 2021–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1688-en&r= |
| By: | Kirui, Oliver; Tambo, Justice |
| Keywords: | Crop Production/Industries, Productivity Analysis |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315882&r= |
| By: | Mohammed, Sadick; Abdulai, Awudu |
| Keywords: | Teaching/Communication/Extension/Profession, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315362&r= |
| By: | Juan Luis Gómez-Reino; Santiago Lago-Peñas; Jorge Martinez-Vazquez |
| Abstract: | The standard theory of optimal jurisdictional size hinges importantly on the existence of economies of scale in the provision of local public goods and services. However, despite its relevance for forced local amalgamation programs and related policies, the empirical evidence on the existence of such economies of scale remains elusive. The main goal of this paper is to produce an updated and comprehensive quantitative review of the existence of economies of scale in the provision of local public goods using a meta-analysis approach to systematize the wide range of empirical approaches and modeling frameworks found in the previous literature. Our analysis confirms the presence of moderately increasing to constant returns to scale in the provision of local services across traditional local service sectors such as education, water and sanitation, and garbage collection. Overall, larger “client†bases do not reduce average costs of production in the delivery of most local public services beyond certain modest jurisdiction size which has been referred to in the literature as 10,000 residents. These findings have significant policy implications for countries considering jurisdictional consolidation programs. |
| Keywords: | Economies of scale, local public service provision; meta-analysis. |
| JEL: | H11 H40 H73 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:gov:wpaper:2103&r= |
| By: | Mottaleb, Khondoker; Hodson, David |
| Keywords: | Crop Production/Industries, Productivity Analysis |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315870&r= |
| By: | Giuseppe Fiori (Board of Governors of the Federal Reserve System); Filippo Scoccianti (Bank of Italy) |
| Abstract: | We study how the timing of technology adoption through capital accumulation shapes firm-level productivity dynamics and quantify its aggregate implications in a model of heterogeneous firms. Using data on the census of incorporated Italian firms and exploiting the lumpiness of capital accumulation, we document that large investment episodes lead to productivity gains at the firm and sectoral level due to vintage effects. In a general equilibrium model of firm heterogeneity, we find that the presence of vintage technology constitutes a powerful microeconomic-based amplification mechanism of aggregate shocks relative to a benchmark real business cycle model. |
| Keywords: | business cycles, (S,s) policies, vintage effects, firm heterogeneity. |
| JEL: | D24 E22 E32 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_651_21&r= |
| By: | Queiroz, Pedro; Fulginiti, Lilyan; Perrin, Richard |
| Keywords: | Resource /Energy Economics and Policy |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315416&r= |
| By: | Luisito Bertinelli (Department of Economics and Management, Université du Luxembourg); Olivier Cardi (Lancaster University Management School); Romain Restout (Université de Lorraine, Université de Strasbourg, CNRS, BETA) |
| Abstract: | Motivated by recent evidence pointing at an increasing contribution of asymmetric shocks across sectors to economic fluctuations, we explore the labor market effects of technology shocks biased toward the traded sector. Our VAR evidence for seventeen OECD countries reveals that the non-traded sector alone drives the increase in total hours worked following a technology shock that increases permanently traded relative to non-traded TFP. The shock generates a reallocation of labor toward the non-traded sector which contributes to 35% on average of the rise in non-traded hours worked. Both labor reallocation and variations in labor income shares are found empirically connected with factor-biased technological change. Our quantitative analysis shows that a two-sector open economy model with flexible prices can reproduce the labor market effects we document empirically once we allow for imperfect mobility of labor, gross substitutability between home- and foreign-produced traded goods, and factor- biased technological change. When calibrating the model to country-specific data, its ability to account for the cross-country reallocation and redistributive effects we esti- mate increases once we let factor-biased technological change vary between sectors and across countries. |
| Keywords: | Sector-biased technology shocks; Factor-augmenting efficiency; Open economy; Labor reallocation; CES production function; Labor income share |
| JEL: | E25 E32 F11 F41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:21-15&r= |
| By: | Fang, Guozhu; Zhang, Xiaoheng; Qi, Chunjie |
| Keywords: | Crop Production/Industries, Livestock Production/Industries |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315129&r= |
| By: | Lukas Kuld (Department of Business and Economics, TU Dortmund); Sara Mitchell (Department of Business and Economics, TU Dortmund); Christiane Hellmanzik (Department of Business and Economics, TU Dortmund) |
| Abstract: | We investigate quantity and quality effects of agglomeration in the careers of American authors. We combine novel yearly data on publications and work location of 471 eminent authors with US Census data to provide a complete picture of industry concentration and agglomeration economies from 1850-2000. We find that, on aggregate, an author has 40\% higher odds of publishing while living in New York City. The effect size increases with industry concentration but declines with industry maturity and technological progress after WWII. Taking relocation of working-age authors to New York City as an event study, we see a significant immediate increase in publications after arriving. In comparison, the penalty of moving away from the city is mild. Works published while an author lived in New York City were more likely to achieve critical acclaim and are more likely to have lasting influence in terms of present-day popularity. |
| Keywords: | Agglomeration economies, urban history, geographic clustering, productivity, literature, creativity |
| JEL: | N30 N90 R11 Z11 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0821&r= |
| By: | Minetti, Raoul (Michigan State University, Department of Economics); Herrera, Ana Maria (University of Kentucky); Schaffer, Matthew (UNC Greensboro) |
| Abstract: | We investigate the effects of financial liberalization on the dynamism of the credit market, as measured by the intensity of credit reallocation across firms. We construct measures of inter-firm credit reallocation in the U.S. states following a methodology akin to Davis and Haltiwanger (1992). We then exploit the staggered deregulation of the credit markets of the states of the eighties as a natural experiment to identify an exogenous shock to the process of credit reallocation. The analysis reveals that the credit market liberalization intensified inter-firm credit reallocation in the states, even within narrowly defined groups of continuing firms, while leaving aggregate credit growth essentially unaltered. The results suggest that, in turn, the increased allocative dynamism of the credit market enhanced the allocation of funds to more productive firms and the TFP growth of the states. |
| Keywords: | Credit Market; Credit Reallocation; Allocative Efficiency; Liberalization |
| JEL: | E44 G20 |
| Date: | 2021–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:msuecw:2021_004&r= |
| By: | Mario Mariniello; Mia Hoffmann |
| Abstract: | This Policy Contribution was produced within the project ‘Future of Work and Inclusive Growth in Europe’, with the financial support of the Mastercard Center for Inclusive Growth Biometric technologies have in principle the potential to significantly improve worker productivity, security and safety. However, they are also a source of new risks, including exposure to potential personal data abuse or the psychological distress caused by permanent monitoring. The European Union lacks... |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:45878&r= |
| By: | Mr. Yannick Timmer; Mr. Nicola Pierri; Toni Ahnert; Sebastian Doerr |
| Abstract: | This paper analyzes the importance of information technology (IT) in banking for entrepreneurship. To guide our empirical analysis, we build a parsimonious model of bank screening and lending that predicts that IT in banking can spur entrepreneurship by making it easier for startups to borrow against collateral. We provide empirical evidence that job creation by young firms is stronger in US counties that are more exposed to ITintensive banks. Consistent with a strengthened collateral lending channel for IT banks, entrepreneurship increases more in IT-exposed counties when house prices rise. In line with the model's implications, IT in banking increases startup activity without diminishing startup quality and it also weakens the importance of geographical distance between borrowers and lenders. These results suggest that banks' IT adoption can increase dynamism and productivity. |
| Keywords: | technology in banking, entrepreneurship, information technology, collateral, screening; banks' IT adoption; importance of information technology; IT in banking; startup activity; bank screening; Collateral; Self-employment; Employment; Job creation |
| Date: | 2021–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/214&r= |
| By: | Bergantino, Angela Stefania; Capozza, Claudia; Spiru, Ada |
| Abstract: | Firms as part of an ecosystem are constrained by many context facets, having different dimensions and effects on their performance. In this work, we explore differences in firm performance in emerging economies by introducing contextual factors at country-level along with firm-level factors into the analysis. Especially, our focus is on a country's transport infrastructure endowment and logistics services as a source of heterogeneity in firm performance. We perform a multilevel analysis that allows us to define a two-level hierarchical structure, where firms are nested in countries. The empirical framework adopted allows us not to neglect other contextual bases by relying on their multidimensionality and global diversity. Our results confirm that part of the country-level variability in firm performance is explained by transport infrastructure and logistics services. The impact is, however, heterogeneous across infrastructures: network-type infrastructures, such as roads, railways, and logistics services, have a larger effect on firm-level performance, while transport nodes, such as airports and ports, show little or no effect. This research provides useful implications for both theory and practice, especially for policymakers and organizations. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:sit:wpaper:21_2&r= |
| By: | Sylvain Marsat (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Guillaume Pijourlet (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne); Muhammad Ullah (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne) |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03183955&r= |
| By: | Badunenko, Oleg; Galeotti, Marzio; Hunt, Lester C. |
| Abstract: | The standard approach to the Environmental Kuznets Curve (EKC) holds that as a country develops and GDP per capita grows environmental degradation initially increases but eventually it reaches a turning point where environmental degradation begins to decline. Environmental degradation takes many forms, one of them being emissions of harmful gases. According to the EKC concept, a country can reduce emissions by ‘growing’. The standard approach implicitly assumes that a country emits as little as possible for its economic development, whereas in reality, a country might emit above the best attainable level of emissions. Therefore, emissions could be reduced before and after the turning point by becoming more environmentally efficient – i.e., ‘improving’ the emissions level. This article proposes a Stochastic Environmental Kuznets Frontier (SEKF) which is estimated for CO2 emissions for OECD countries and used to benchmark each country before and after the turning point differently, thus, indicating how a country could ‘grow’ and/or ‘improve’ to reduce its CO2 emissions. Additionally, we analyse the role of the stringency of environmental policies in reducing a country’s carbon inefficiency measured by the distance from the benchmark EKC and find widespread carbon inefficiencies that could be reduced by more stringent market-based environmental policies. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2021–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:316226&r= |
| By: | Mr. Sonali Das; Mr. Philippe Wingender; Evgenia Pugacheva; Giacomo Magistretti |
| Abstract: | This paper examines the role of sectoral spillovers in propagating sectoral shocks in the broader economy, both in the past and during the COVID-19 pandemic. In particular, we study how shocks that occur within a sector itself and spillovers from shocks to other sectors affect sectoral activity, for a large sample of countries from 1995 to 2014. We find that both supply and demand shocks—measured as changes in, respectively, productivity and government purchases at the sector level—have large spillover effects on sector-level gross value added and on a sector’s share of the economy. We then use these historical estimates, together with the network structure of global production, to quantify the spillovers from the economic shock associated with the pandemic. We find spillover effects to be sizeable, making up a significant fraction of the overall decline in activity in 2020.Our results have implications for the design of policies with a sectoral dimension. |
| Keywords: | spillover effect; appendix C. Construction; supply and demand demand shock; spillovers from shock; sector recovery; Spillovers; COVID-19; Supply shocks; Total factor productivity; Global |
| Date: | 2021–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/204&r= |