Malmquist indexes using a geometric distance function (GDF):application to a sample of Portuguese bank branches

Traditional approaches to calculate total factor productivity (TFP) change through Malmquist indexes rely on distance functions. In this paper we show that the use of distance functions as a means to calculate TFP change may introduce some bias in the analysis, and therefore we propose a procedure that calculates TFP change through observed values only. Our total TFP change is then decomposed into efficiency change, technological change, and a residual effect. This decomposition makes use of a non-oriented measure in order to avoid problems associated with the traditional use of radial oriented measures, especially when variable returns to scale technologies are to be compared. The proposed approach is applied in this paper to a sample of Portuguese bank branches.

Measuring and decomposing changes in agricultural productivity, nitrogen use efficiency and cumulative exergy efficiency: Application to OECD agriculture

This paper uses an aggregate quantity space to decompose the temporal changes in nitrogen use efficiency and cumulative exergy use efficiency into changes of Moorsteen–Bjurek (MB) Total Factor Productivity (TFP) changes and changes in the aggregate nitrogen and cumulative exergy contents. Changes in productivity can be broken into technical change and changes in various efficiency measures such as technical efficiency, scale efficiency and residual mix efficiency. Changes in the aggregate nitrogen and cumulative exergy contents can be driven by changes in the quality of inputs and outputs and changes in the mixes of inputs and outputs. Also with cumulative exergy content analysis, changes in the efficiency in input production can increase or decrease the cumulative exergy transformity of agricultural production. The empirical study in 30 member countries of the Organisation for Economic Co-operation Development from 1990 to 2003 yielded some important findings. The production technology progressed but there were reductions in technical efficiency, scale efficiency and residual mix efficiency levels. This result suggests that the production frontier had shifted up but there existed lags in the responses of member countries to the technological change. Given TFP growth, improvements in nutrient use efficiency and cumulative exergy use efficiency were counteracted by reductions in the changes of the aggregate nitrogen contents ratio and aggregate cumulative exergy contents ratio. The empirical results also confirmed that different combinations of inputs and outputs as well as the quality of inputs and outputs could have more influence on the growth of nutrient and cumulative exergy use efficiency than factors that had driven productivity change. Keywords: Nutrient use efficiency; Cumulative exergy use efficiency; Thermodynamic efficiency change; Productivity growth; OECD agriculture; Sustainability

Distribution trade sector output and productivity performance : a case study of Singapore and Hong Kong 2001-2008

This paper employs the industry of origin approach to compare value added and productivity of Singapore and Hong Kong's Distribution Trade Sector for the period 2001-2008. The direct comparison between these two economies was motivated by the statements of the Singapore government: Its services sector, especially in Retail Trade, lags behind Hong Kong's productivity levels. The results show that since 2005, Singapore's Distribution performance in terms of labour productivity was below Hong Kong's level, which was largely due to poor performance in its Retail Trade sector arising from an influx of foreign workers. Results from total factor productivity (TFP) between these two economies also suggest that Hong Kong's better performance (since 2005) was largely due to its ability to employ more educated and trained workers with limited use of capital. The results suggest that polices that worked in Hong Kong may not work for Singapore because its population is more diverse which poses a challenge to policy-makers in raising its productivity level.

Output and productivity comparisons of the Singapore and Hong Kong wholesale and retail trade sectors, 2001–2008

This paper employs the industry of origin approach to compare value-added and labour productivity of Singapore and Hong Kong’s wholesale and retail sectors for the period 2001–08. The direct comparison between these two economies was motivated by the statement of the Singapore Government that its services sector, especially the retail sector, lagged behind Hong Kong’s productivity levels. The results show that since 2005, Singapore’s wholesale and retail sector performance in terms of labour productivity has been below Hong Kong’s level, largely due to the poor performance of its retail sector arising from an influx of foreign workers. Results from total factor productivity analysis of these two economies also suggest that Hong Kong’s better performance (since 2005) was largely due to its ability to employ more educated and trained workers with limited use of capital. The results suggest that polices that have worked in Hong Kong may not work in Singapore because its population is more diverse, which poses a challenge to policymakers in raising its productivity level.

Productivity and convergence in India : a state-level analysis

Total factor productivity plays an important role in the growth of the Indian economy. Using state-level data from 1993 to 2005 that were recently made available, we find widespread regional variation in productivity changes. In the years immediately following economic liberalization, productivity growth improved technical efficiency; however, in subsequent years, productivity growth was propelled by technological progress. We find a tendency toward convergence with regard to productivity growth among states; however, the states that were technically efficient when the economic reforms were instituted remained innovative in later years.

The pollution release and transfer register system in the U.S. and Japan : an analysis of productivity

This study analyzes Total Factor Productivity (TFP), which includes all categories of productivity. Our measure investigates productivity in the context of the provision and dissemination of environmental information policies. We investigated data on the emission of toxic chemical substances for the U.S. and Japanese manufacturing firms, including 386 firms for the period 1999-2007 and 466 firms for the period 2001-2008. The results show that productivity improved in all nine industrial sectors and that pollution levels were high in the U.S. and Japan from 2001 to 2007. In particular, the electronics industry improved rapidly after 2002 in both countries, which may be attributed to the enforcement of RoHS and the REACH directive in Europe. As a result of these stringent policies on toxic chemical emissions, the U.S. and Japanese firms, many of which export to the European market, have strong incentives to reduce their toxic chemical emissions.

Productivity measures and effects from subsidies and trade : an empirical analysis for Japan's forestry

Several techniques have been proposed in the literature to measure productivity. While allowing for inefficiency of the production unit, we provide a methodological comparison of alternative approaches to measure total factor productivity. This article evaluates the effects of unintended policy outcomes such as government subsidies and foreign trade. Empirically, we analyse the forest productivity of timber in Japan by using panel data on 46 regions. The results suggest substantial variation in productivity between these two techniques although average trends are similar. We find that subsidies impede competition since the government is ready to rescue a loss-making firm with subsidies rather than allow it to close. In contrast, trade is shown to have positive effects on productivity.

Land leasing, land degradation and agricultural productivity in Finland

This study analysed whether the land tenure insecurity problem has led to a decline in long-term land improvements (liming and phosphorus fertilization) under the Common Agricultural Policy (CAP) and Nordic production conditions in European Union (EU) countries such as Finland. The results suggests that under traditional cash lease contracts, which are encouraged by the existing land leasing regulations and agricultural subsidy programs, the land tenure insecurity problem on leased land reduces land improvements that have a long pay-back period. In particular, soil pH was found to be significantly lower on land cultivated under a lease contract compared to land owned by the farmers themselves. The results also indicate that land improvements could not be reversed by land markets, because land owners would otherwise have carried out land improvements even if not farming by themselves. To reveal the causality between land tenure and land improvements, the dynamic optimisation problem was solved by a stochastic dynamic programming routine with known parameters for one-period returns and transition equations. The model parameters represented Finnish soil quality and production conditions. The decision rules were solved for alternative likelihood scenarios over the continuation of the fixed-term lease contract. The results suggest that as the probability of non-renewal of the lease contract increases, farmers quickly reduce investments in irreversible land improvements and, thereafter, yields gradually decline. The simulations highlighted the observed trends of a decline in land improvements on land parcels that are cultivated under lease contracts. Land tenure has resulted in the neglect of land improvement in Finland. This study aimed to analyze whether these challenges could be resolved by a tax policy that encourages land sales. Using Finnish data, real estate tax and a temporal relaxation on the taxation of capital gains showed some potential for the restructuring of land ownership. Potential sellers who could not be revealed by traditional logit models were identified with the latent class approach. Those landowners with an intention to sell even without a policy change were sensitive to temporal relaxation in the taxation of capital gains. In the long term, productivity and especially productivity growth are necessary conditions for the survival of farms and the food industry in Finland. Technical progress was found to drive the increase in productivity. The scale had only a moderate effect and for the whole study period (1976–2006) the effect was close to zero. Total factor productivity (TFP) increased, depending on the model, by 0.6–1.7% per year. The results demonstrated that the increase in productivity was hindered by the policy changes introduced in 1995. It is also evidenced that the increase in land leasing is connected to these policy changes. Land institutions and land tenure questions are essential in agricultural and rural policies on all levels, from local to international. Land ownership and land titles are commonly tied to fundamental political, economic and social questions. A fair resolution calls for innovative and new solutions both on national and international levels. However, this seems to be a problem when considering the application of EU regulations to member states inheriting divergent landownership structures and farming cultures. The contribution of this study is in describing the consequences of fitting EU agricultural policy to Finnish agricultural land tenure conditions and heritage.

Produtividade Total dos Fatores: revisão da literatura e uma aplicação exploratória para a cultura do milho usando os dados dos censos agropecuários

Este trabalho pretende contribuir para o entendimento sobre a produtividade na agricultura brasileira, bem como propõe uma reflexão sobre o debate da produtividade total dos fatores. Para isso, buscou-se, antes de tudo, debater as medidas de produtividade, sobretudo as medidas de produtividade total dos fatores e, em seguida, apresentar estimativas da produtividade total na agricultura no Brasil e no mundo. Propõem-se também uma estimativa preliminar dessa metodologia para o cálculo da produtividade total dos fatores na cultura do milho através do índice de Tornqvist. O objetivo é, então, revisar a literatura teórica e empírica sobre a produtividade total dos fatores na agricultura e calcular as produtividades parciais e totais na cultura do milho para os estados brasileiros. Apesar da maior parte dos resultados encontrados no cálculo da produtividade total para a cultura do milho no Brasil não terem sido consistentes, a conclusão geral do levantamento bibliográfico foi que tanto a agricultura brasileira quanto a agricultura mundial, independente da metodologia utilizada, apresentou uma tendência ao crescimento da produtividade total dos fatores.

Can China’s Growth be Sustained? A Productivity Perspective

China’s gradual approach to economic transition has resulted in sustained high growth. However, in recent years Chinese economists have increasingly referred to the growth pattern as “extensive,” generated mainly through the expansion of inputs. Our investigation of the Chinese economy during the reform period finds that reform measures often resulted in one-time level effects on total factor productivity (TFP). China now needs to adjust its reform program toward sustained increases in productivity. Market and ownership reforms, and open door policies have improved the conditions under which Chinese firms operate, but further institutional reforms are required to consolidate China’s move to a full-fledged market economy.

The determinants of retail productivity: a critical review of the evidence

This paper discusses the literature on the established determinants of productivity in the retail sector. It also draws attention to some neglected strands of research which provide useful insights into strategies that could allow productivity enhancements in this area of the economy. To date, very few attempts have been made to integrate different specialisms in order to explain what drives productivity in retail. Here this paper rectifies this omission by putting together studies from economics, geography, knowledge management and employment studies. It is the authors' view that quantitative studies of retail productivity should focus on total factor productivity in retailing as the result of competition/composition effects, planning regulations, information and communications technology, the multinational operation element and workforce skills. Further, the fact that retail firms possess advantages that are transferable between locations suggests that investment in strategies enhancing the transfer of explicit and tacit knowledge between and within businesses are crucial to achieve productivity gains.

Reforms, incentives, welfare and productivity growth in Chinese wheat production

Following the 1978 rural reform, a series of agricultural reforms were introduced in China with an aim to create incentives for the farmers to produce more. However, the nineties’ reforms towards liberalization eventually resulted in a huge drop in agricultural production, which apparently motivated the grain self-sufficiency program in 1998. For a dataset that covers wheat production during these reforms, we examine how and to what extent these reforms affected the Total Factor Productivity (TFP) and the welfare of wheat farmers in China, both at the national and at the regional level. We find that although the nineties' price reforms led to a relatively faster growth of the incentivized TFP of wheat production, they failed to improve profits vis a vis welfare for the farmers. A series of weather shocks in the early nineties resulted in a scarcity of cultivable land and a shortage of agricultural labour, which eventually led to a sharp increase in their relative prices. The introduction of grain self-sufficiency program stabilized these agricultural prices but destroyed the growth in TFP for most regions. However, this reform resulted in some improvement in farmers’ welfare. Wheat farmers in China therefore experienced a trade off between productivity and welfare; competition boosted their productivity and regulation improved their welfare. Not only these findings add a completely new set of results to the existing literature, they can also form a strong basis for future agricultural reforms in China.

Productivity and the international firm: dissecting heterogeneity

Higher productivity of multinational firms and exporters has been widely documented in the literature, but the sources of this heterogeneity are still a black box. Using an original dataset on Italian firms, we show that higher total factor productivity of international firms can be to some extent explained by higher R&D intensity and managerial capabilities. However, our results suggest that heterogeneity is more in the slope than in the constant of the production function. In particular, allowing international firms to have different return to labour and capital inputs, we are able to account for their entire productivity premium. This has implications for both labour and capital market reforms.

Productivity of nations: a stochastic frontier approach to TFP decomposition

This Paper Tackles the Problem of Aggregate Tfp Measurement Using Stochastic Frontier Analysis (Sfa). Data From Penn World Table 6.1 are Used to Estimate a World Production Frontier For a Sample of 75 Countries Over a Long Period (1950-2000) Taking Advantage of the Model Offered By Battese and Coelli (1992). We Also Apply the Decomposition of Tfp Suggested By Bauer (1990) and Kumbhakar (2000) to a Smaller Sample of 36 Countries Over the Period 1970-2000 in Order to Evaluate the Effects of Changes in Efficiency (Technical and Allocative), Scale Effects and Technical Change. This Allows Us to Analyze the Role of Productivity and Its Components in Economic Growth of Developed and Developing Nations in Addition to the Importance of Factor Accumulation. Although not Much Explored in the Study of Economic Growth, Frontier Techniques Seem to Be of Particular Interest For That Purpose Since the Separation of Efficiency Effects and Technical Change Has a Direct Interpretation in Terms of the Catch-Up Debate. The Estimated Technical Efficiency Scores Reveal the Efficiency of Nations in the Production of Non Tradable Goods Since the Gdp Series Used is Ppp-Adjusted. We Also Provide a Second Set of Efficiency Scores Corrected in Order to Reveal Efficiency in the Production of Tradable Goods and Rank Them. When Compared to the Rankings of Productivity Indexes Offered By Non-Frontier Studies of Hall and Jones (1996) and Islam (1995) Our Ranking Shows a Somewhat More Intuitive Order of Countries. Rankings of the Technical Change and Scale Effects Components of Tfp Change are Also Very Intuitive. We Also Show That Productivity is Responsible For Virtually All the Differences of Performance Between Developed and Developing Countries in Terms of Rates of Growth of Income Per Worker. More Important, We Find That Changes in Allocative Efficiency Play a Crucial Role in Explaining Differences in the Productivity of Developed and Developing Nations, Even Larger Than the One Played By the Technology Gap