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on Efficiency and Productivity |
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Issue of 2023‒03‒06
eleven papers chosen by |
| By: | Stephen Ayerst; Loren Brandt; Diego Restuccia |
| Abstract: | The expansion in farm size is an important contributor to agricultural productivity in developed countries, but the reallocation process is hindered in less developed economies. How do distortions to factor reallocation affect farm dynamics and agricultural productivity? We develop a model of heterogeneous farms making cropping choices and investing in productivity improvements. We calibrate the model using detailed farm-level panel data from Vietnam, exploiting regional differences in agricultural institutions and outcomes. We focus on south Vietnam and quantify the effect of higher measured distortions in the North on farm choices and agricultural productivity. We find that the higher distortions in north Vietnam reduce agricultural productivity by 46%, accounting for around 70% of the observed 2.5-fold difference between regions. Moreover, two-thirds of the productivity loss is driven by farms' choice of lower productivity crops and reductions in productivity-enhancing investment, which more than doubles the productivity loss from factor misallocation. |
| Keywords: | Farm dynamics, productivity, size, distortions, misallocation, Vietnam. |
| JEL: | O11 O14 O4 |
| Date: | 2023–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-748&r=eff |
| By: | Roberto Ganau; Andres Rodriguez-Pose; ; |
| Abstract: | We analyse the firm-level labour productivity growth returns of social capital —defined as a synthetic measure of ‘generalised trust’, ‘active participation’, and ‘social norms’— using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms’ labour productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems. |
| Keywords: | Firm labour productivity growth; Social capital; Manufacturing industry; Western Europe. |
| JEL: | C36 D24 R10 Z13 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2305&r=eff |
| By: | Josh Martin; Jon Franklin |
| Abstract: | We explore the appropriate conceptual framework for thinking about the output and productivity of the non-profit sector, and sketch a roadmap for measuring the productivity of the sector. Doing so requires us to go beyond the National Accounts, since some inputs to the non-profit sector (such as volunteer time) are outside the GDP boundary. Using a range of publicly available data we estimate new input and output measures for the Non-Profit Institutions Serving Households (NPISH) sector, and from these estimate productivity levels and growth. We find that the NPISH sector in the UK has grown rapidly over the past 20 years, with hours worked and nominal GVA growing faster than for the economy as a whole. Our fuller measures suggest NPISH accounts for about 4.4% of GDP in 2019, compared with 2.9% before conceptual adjustments, and up from 3.3% two decades before. The NPISH sector is less productive than the UK average, although similar to other labour-intensive industries like retail. We estimate little growth in real productivity, although price measurement in the relevant industries is difficult, so there is considerable uncertainty around our estimates of real GVA and productivity growth. There are also conceptual and practical difficulties in measuring the value of a sector that is likely to exhibit significant positive externalities, such that our adjusted measures still undervalue the sector. |
| Keywords: | non-profit institutions, National Accounts, productivity, economic measurement |
| JEL: | E24 L31 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:escoed:escoe-dp-2022-24&r=eff |
| By: | Fernando Cárdenas Echeverri; Andres García-Suaza; Juan Esteban Garzon Restrepo |
| Abstract: | This paper studies the relationship between managerial capital, social capital and firm productivity in Colombia, and explores whether this relationship depends on labor quality and formality. Results confirm a positive and significant effect of firm capabilities (managerial and social capital) on TFP (total factor productivity) and suggest a substitution effect between them. A positive effect of labor quality and formality on firm productivity is documented. Even though results are not conclusive, labor quality appears to increase the effect of managerial capital and reduce that for social capital, while labor formality seems to have no impact on their marginal effect. This is important for policy makers reinforcing the importance of quality education, labor formality and the relevance of programs promoting adoption of managerial practices and development of networks. |
| Keywords: | Productivity, Managerial Capital, Social Capital, Labor formality, Developing countries |
| JEL: | L10 L25 M21 O40 |
| Date: | 2023–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:020641&r=eff |
| By: | Diane Coyle; Rehema Msulwa |
| Abstract: | Construction is a large sector of the UK economy and official statistics show that construction productivity has flatlined despite adoption of advances in digital technology and increased outsourcing. We examine the evolution of the UK infrastructure construction industry and the scope for its digitization, describing the changing industry structure and the range of digital technologies being adopted. We consider the implications of technological innovation for productivity, both actual and measured. We focus on two possible explanations for this particular piece of the productivity puzzle: time lags and different potential sources of mismeasurement. |
| Keywords: | construction, digitisation, infrastructure, productivity |
| JEL: | L10 L11 L16 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:escoed:escoe-dp-2022-21&r=eff |
| By: | sethi, Kalyani; mishra, Dr. Bikash Ranjan |
| Abstract: | Indian traditional medicine comprises indigenous medical traditions (Bode, 2006). This ancient Indian predictive and personalized medicine system is still relevant today (Lemonnier, 2017). Yet, this medical system suffers many challenges due to the practice of western medicine. Therefore, there is a big need to study the existence and performance of these medicines through different companies. Coming to western medicine has made significant progress around the world over the past century. Many life-saving new drugs have been discovered to deal with various infectious and fatal diseases. Despite the undeniable benefits of modern medicine, which relies on scientific assays and results to establish the diagnosis and fight disease, a large portion of the world continues to rely on modern forms of Traditional, Complementary, and Alternative Medicines (CAM). Therefore, our paper focuses on studying the efficiency across Traditional Knowledge-based (TKBM) and Western Medicine (WM) companies using the data envelopment analysis (DEA) model. The study is a comparative study of ten years, from 2009-2018, using the CMIE Prowess IQ database. The second test concentrates on the effects of some firm-specific and financial variables on the efficiency of the respective companies. Lastly, the paper suggests that adopting cost management techniques will help these companies to improve their profit. |
| Keywords: | Traditional Knowledge-based Medicine; Western Medicine; Efficiency; Data Envelopment Analysis. |
| JEL: | L1 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:116182&r=eff |
| By: | Kim Huynh; Robert Petrunia; Joel Rodrigue; Walter Steingress |
| Abstract: | We examine the relationship between firms’ performance and credit constraints affecting export market entry. The existing research assumes that variation in firms’ financial conditions identifies credit constraints. A critical assumption is that financial conditions do not affect real outcomes (performance, exporting, or investment). To relax this assumption, we focus on the direct effect of firms’ fundamentals and financial conditions on firms’ performance. This approach distinguishes between firms that choose not to export because it is unprofitable from firms that do not export because of binding credit constraints. Our empirical specification allows firms’ characteristics to enter both the selection into exporting and return from exporting regressions. The leverage response heterogeneity identifies the presence of credit constraints. Using administrative Canadian firm-level data, our findings show that new exporters (a) increase their productivity, (b) raise their leverage ratio and (c) increase investment. We estimate that 48 percent of Canadian manufacturers face binding credit constraints when deciding whether to enter export markets. Alleviating these constraints would increase aggregate productivity by 0.97–1.04 percentage points. |
| Keywords: | Econometric and statistical methods; Firm dynamics; International topics; Productivity |
| JEL: | F10 F14 F36 G20 G28 G32 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:23-10&r=eff |
| By: | Qianying JIN (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, 211106, China); Kristiaan KERSTENS (Univ. Lille, CNRS, IESEG School of Management, UMR 9221 - LEM - Lille E´conomie Management, Lille, France); Ignace VAN DE WOESTYNE (KU Leuven, Research Centre for Operations Research and Statistics (ORSTAT), Brussels Campus, War- moesberg 26, B-1000 Brussels, Belgium) |
| Abstract: | Effective methods for determining the boundary of the normal class are very useful for detecting anomalies in commercial or security applications - a problem known as anomaly detection. This contribution proposes a nonparametric frontier-based clas- sification (NPFC) method for anomaly detection. By relaxing the commonly used convexity assumption in the literature, a nonconvex NPFC method is constructed and the nonconvex nonparametric frontier turns out to provide a more conservative bound- ary enveloping the normal class. By reflecting on the monotonic relation between the characteristic variables and the membership, the proposed NPFC method is in a more general form since both input-type and output-type characteristic variables are incor- porated. A biomedical data set is used to test the performance of the proposed NPFC methods. The results show that the proposed NPFC methods have competitive clas- sification performance and have consistent advantages in detecting abnormal samples, especially the nonconvex NPFC method |
| Keywords: | : Nonparametric Frontier; Convex; Nonconvex; Anomaly Detection |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e202302&r=eff |
| By: | Kevin Lee; Michael J Mahony; Paul Mizen |
| Abstract: | This technical note provides new economic measures of the flexible price level, flexible output level and marginal costs for the UK. Using a straightforward decomposition from first principles this technical note shows that the flexible price level in period t is a weighted average of the period t and t -1 price levels - where the weights are determined by the proportion of firms adjusting their price. Similarly, the flexible output level in period t is a weighted average of the period t and t - 1 output levels - where the weights are determined by the proportion of firms altering their production plans. For the proportion of firms which do not alter their production plans, straightforward calculus shows their change in average costs is proportional to marginal costs. Using a unique dataset (of firm-level survey responses on changes in price and output), this technical note constructs flexible price indices, flexible output indices and marginal cost indices for the UK. |
| Keywords: | flexible prices, flexible output, marginal costs, Calvo staggered pricing |
| JEL: | C80 E31 E32 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:escoed:escoe-dp-2023-01&r=eff |
| By: | Kai Carstensen; Felix Kießner; Thies Rossian |
| Abstract: | In this paper we augment the Bayesian unobserved components model of the EU Commission to estimate the cyclical component of total factor productivity (TFP gap) with a factor structure to include a wide array of business cycle indicators. We demonstrate that this model extension considerably stabilizes the estimate of the of the TFP gap. Specifically, consider the usual autumn forecast of the EU Commission in October of a year T. For the last two “in-sample” years T − 2 and T − 1, and for the “now-cast” year T, the year-to-year revisions can be reduced by up to 30 percent. Improvements for the two “out-of-sample” years T + 1 and T + 2 also considered relevant by the EU Commission are quantitatively smaller (up to 10 percent) but still relevant. The results do vary across countries but are qualitatively robust with respect to different indicator sets, model specifications or vintages considered. |
| Keywords: | trend-cycle decomposition, unobserved components model, factor model, Bayesian estimation, total factor productivity, EU Commission |
| JEL: | C32 E37 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10245&r=eff |
| By: | Bruno Pellegrino |
| Abstract: | This paper develops a theory of oligopoly and markups in general equilibrium. Firms compete in a network of product market rivalries that emerges endogenously out of the characteristics of the products and services they supply. My model embeds a novel, highly tractable and scalable demand system (GHL) that can be estimated for the universe of public corporations in the USA, using publicly-available data. Using the model, I compute firm-level markups and decompose them into: 1) a new measure of firm productivity that accounts for product quality; 2) a metric of network centrality, which captures the extent of competition from substitute products. I estimate that, in 2019, public corporations produced consumer surplus in excess of 10 US$ trillions (against $3 trillions of profits). Oligopoly lowers total surplus by 11.5% and depresses consumer surplus by 31%. My analysis also suggests that both numbers were significantly lower in the mid-90s (7.9% and 21.5%, respectively). These results should be interpreted with care due to data limitations. |
| Keywords: | competition, concentration, general equilibrium, market power, markups, mergers, monopoly, networks, oligopoly, text analysis |
| JEL: | D20 D40 D60 E20 L10 O40 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10244&r=eff |