Total factor productivity

What determines a country's ability to compete in international markets? What fosters the global competitiveness of its firms? And in the European context, have key elements of the EU strategy such as EMU and enlargement helped or hindered domestic firms' competitiveness in local and global markets? We address these questions by calibrating and simulating a conceptual framework that, based on Melitz and Ottaviano (2005), predicts that tougher and more transparent international competition drives less productive firms out the market, thereby increasing average productivity as well as reducing average prices and mark-ups. The model also predicts a parallel reduction of price dispersion within sectors. Our conceptual framework allows us to disentangle the effects of technology and freeness of entry from those of accessibility (i.e. the ease for local firms to reach local and foreign consumers). On the one hand, by controlling for the impact of trade frictions, we are able to co...

This paper analyzes productivity growth trends in emerging-market economies vis-à-vis advanced economies, both in the recent global productivity slowdown and from a long-term perspective. While income has converged in most countries in the last three decades, total factor productivity has diverged. Periods of high productivity growth coincide with episodes of output accelerations, while during normal times productivity growth is modest. Most recently, the correlation between productivity growth in emerging markets and advanced economies has increased. This paper analyzes potential factors explaining this increase, which presumably is due to the slowdown in trade and microeconomic factors that underlie technology diffusion. It concludes with a discussion of long-term challenges and opportunities facing emerging-market economies in a low productivity environment.

Pakistan is the 15th largest producer of sugar in the world, 5th largest in terms of area under sugar cultivation and 60th in yield. The sugar industry is the 2nd largest agro based industry which comprises of 81 sugar mills. With this scenario, Pakistan has to import sugar which exposes it to the effects of shortage and rising prices in the world. The present sugar crisis has opened up new avenues for researcher to analyse the performance and efficiency of the firms in this sector. Total factor productivity plays a significant role in measuring the performance of a firm which ultimately affects the shareholder’s value. This paper analyses the performance of sugar firms in Pakistan and estimate/calculate the Malmquist total factor productivity growth indices using non-parametric approach. TFP growth is further decomposed into technical, scale and managerial efficiency change using balanced panel data of 20 sugar firms listed on Karachi Stock Exchange for the period 1998 to 2007. The...

Given the concern about the low growth rates in African countries, this paper deals with the issue of how to increase the said growth rates by using South Africa as a case study. This paper attempts to answer this question by examining the determinants of total factor productivity (TFP)and productivity growth. We utilise the theoretical insights from the Solow (1956) growth model and its extension by Mankiw, Romer and Weil (1992). Our empirical methodology is based on the London School of Economics Hendry’s General to Specific Instrumental Variable method and Gregory and Hansen’s (1996a; 1996b) structural break technique. Our findings imply that variables like human capital, trade openness, foreign direct investment, financial efficiency, democracy and financial reforms improves TFP and productivity growth in South Africa. Importantly, the key determinants appear to be democracy and financial liberalisation.

This paper analyzes how privatization can in¯uence the eciency of a ®rm's operations. Canadian National (CN), a privatized ®rm, and its closest private sector competitor, Canadian Paci®c (CP), are compared both before and after the privatization of CN. The total factor productivity of the two carriers is examined over a 17-year period (1981±1997). Accounting ratios and stock price returns are compared from 1995 to 1998. The results show that although CN was less ecient from 1981 to 1991, its performance increased to surpass that of CP during the post-privatization period.

This paper estimates economic efficiency, TFP change, and technical change of the Greek banking system over the period 1993᎐1998. The beginning of the examination period coincides with the acceleration of liberalization and deregulation of the Greek financial system, in view of the country joining the EMU. The study uses Data Envelopment Analysis to measure technical and allocative efficiency. Also, productivity change is computed using the Malmquist Total Factor Productivity approach and is composed of technical and efficiency changes. The results show that the majority of the Greek banks operate close to best market practices, while allocative inefficiency costs seem to be more important than technical inefficiency costs. Also, the positive but not substantial TFP change of the Greek banking system is associated to efficiency improvement for the medium-sized banks and to technical change improvement for larger institutions. ᮊ 2002 Elsevier Science B.V. All rights reserved. JEL classifications: D24; G21

This paper deals with the devastating food insecurity in two densely populated provinces in the north of Burundi as a result of overpopulation and low production capacity in the aftermath of conflict. We compare data that was collected in the Ngozi and Muyinga Province in 2007 with data of households interviewed on the same hills in 1996. Households live from

Controversial arguments abound in the previous research on the relationship between R&D output and firm size, with these arguments implying the existence of a nonlinear relationship between the two. However, such a relationship has never been seriously examined. This study therefore aims to examine the nonlinear relationship between R&D productivity and firm size using a longitudinal dataset. In this article, the Taiwanese electronics industry is taken as the analytical sample since this industry has been viewed as the most R&D-intensive and prominent 'high-tech sector'. Another, more practical consideration for choosing this sector is the relative abundance of data available for variables for a longitudinal investigation.

Capital subsidization is a widespread instrument of regional and industrial policy in Europe. A number of recent works have examined the influence of capital subsidization on the total factor productivity of recipient sectors and firms, and have provided strong evidence of neutral or even negative effects. The present study examines the effect of capital subsidization on four dimensions of the financial performance of firms, that is efficiency, profitability, capital structure, and growth, and provides evidence that capital subsidization affects solely firm growth.

This paper provides an overview of the literature on private equity and leveraged buyouts, focusing on global evidence related to both governance and returns to private equity and leveraged buyouts. We distinguish between financial and real returns to this activity, where the latter refers to productivity and broader performance measures. We also outline a research agenda on this topic.

The structure of banking systems in GCC countries; namely, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates, has substantially changed over the past decade, mainly as a result of regional economic integration and banking deregulation. The new banking environment has given banks an incentive to focus on cost and productive efficiency. This study uses a non-parametric frontier approach to compare and contrast the efficiency performance, efficiency and technological change, and productivity growth of banks in GCC countries. The results indicate that banks in Oman, on average, have been the most efficient among GCC countries followed narrowly by banks from Bahrain and to a lesser extent by banks from Kuwait. In contrast, the findings point to a low efficient banking environment in UAE and Qatar, with Saudi Arabia being the least efficient. Additionally, the efficiency measures of banks in Oman and Kuwait has been descending from 1999 to 2004, while at the same time the efficiency scores of banks in Bahrain have been rising. Furthermore, banks from Oman and Bahrain are dominating the common efficient frontier since a larger percentage of banks from these countries lie on the frontier. Examination of return to scale measures provides evidence to indicate that there is very limited opportunity for banks to improve their scale efficiency, given that only a handful of banks are operating at increasing returns to scale. The result of the Malmquist productivity index reveals that banks on average have experienced a decline in productivity due to technological regress and to a lesser extent caused by a decline in overall technological efficiency.

ABSTRACT: The objective of this paper is to apply a Cobb-Douglas, Translog Stochastic Production Function and Data Envelopment Analysis in order to estimate inefficiencies over time as well as respective TFP (Total Factor Productivity) sources for main Brazilian grain ...

This paper focuses on the evolution of productivity in the telecommunications industries for 13 OECD countries over the period 1979-1998. It uses Data Envelopment Analysis, a non-parametric approach that allows decompositions of changes in productivity into varia- tions in efficiency and technical change. Moreover, it tests the existence of convergence in labor and total factor productivity levels among the 13

Many writers have claimed that research and development (R&D) has two faces. In addition to the conventional role of stimulating innovation, R&D enhances technology transfer (absorptive capacity). We explore this idea empirically using a panel of industries across twelve OECD countries. We find R&D to be statistically and economically important in both technological catch-up and innovation. Human capital also plays an major role in productivity growth, but we only find a small effect of trade. In failing to take account of R&D-based absorptive capacity, existing U.S.-based studies may underestimate the return to R&D.

This study was conducted in the Gezira scheme. Covering the period 1980-2002. The study aimed to decompose total factor productivity index of wheat production into tow components the technological change (TC) and the efficiency change (EC). By using relevant secondary data collected from Gezira board units and Agricultural Research Corporation analyzed to test the objectives of the study. Results showed that all the changes in total factor productivity (TFP) were mainly due to technological change (TC). In fact, the efficiency change (EC) for the whole period of 1980 -2002 was only zero implying that the management was efficient. While the contribution of technology change (TC) was -4%. The study recommended that: investment in wheat breeding technology through research and development is of great importance. Adoption of more efficient extension programs is required, to be supported by training farmers on good crop management practices including efficient use of irrigation water. The study also recommended provision of credit to the farmers to enable them to purchase and use modern inputs; to improve marketing facilities and to increase the productivity and product of wheat in the Gezira Scheme.

We propose a Neo-Heckscher-Ohlin (HO) model of trade that combines comparative endowment advantage, comparative technological advantage, international capital mobility and trade costs. Using an inframarginal approach, we produce a partition of the exogenous parameter space in a host of parameter value subsets that demarcate the various equilibrium patterns of production and trade. The results are startling! They suggest that production within the diversification cone -a key assumption of the Heckscher-Ohlin theory that is required for its core propositions (such as factor price equalisation) to hold -may only prevail on the razor's edge, or under exceptional circumstances. In addition, our findings nominate a mechanism by which improvements in transaction efficiency facilitate international trade thereby stimulating cross-country division of labour. Contrary to other generalisations of the Heckscher-Ohlin (such as the various derivatives of the Kemp-Jones model of trade), our model does not assume a purely Ricardian character: comparative endowment advantage may determine the pattern of trade even in the presence of opposing technological differences, as long as total factor productivity coefficients adjusted for transaction efficiency and factor intensity do not confer unambiguous comparative (technological) advantage. Still, 'intensity-efficiency'-adjusted comparative technological advantage supersedes factor endowments in determining the flow of trade. * We, Tombazos and Zhang, would like to dedicate this paper to our dear friend and colleague Xiaokai Yang who died in mid-2004. It is with a heavy heart that we acknowledge this contribution as one of our last co-authored papers with Xiaokai. This research has benefited considerably from discussions with Alan Deardorff, Peter Neary and Hugo Sonnenschein whom we also thank, together with Ron Jones, Murray Kemp, Ed Ray, Don Wright and an anonymous referee for very constructive suggestions on earlier drafts of this

The issue of improving productivity growth is well stressed in developing and less developing countries that confront a severe economic and social deterioration owing to the misuse of the available human and physical resources. Education, as a main component of human capital, plays a leading role beyond that of physical capital in prompting Total Factor Productivity growth through its potential spillover effects on the technical change and efficiency improvement.  Hence, considering education quality embedded in human capital attributable to the rising educational attainment of the labor force is a priority.  On this ground, the aim of the paper is to examine the long run impact of education quality on TFP growth in Egypt during the period (1980-2014). In a two-step approach, the Gauss-Newton algorithm method is used in estimating the nonlinear Cobb-Douglas production function to calculate TFP series. In the second step, the TFP determinants have been estimated by paying special attention to education indicators besides other control variables through applying the Autoregressive Distributed Lag Bounds test approach of co-integration. Results revealed that TFP growth appears to be significantly slightly enhanced by quality improvements in higher education only. Some reforms must be done on the basis of analysis and research.

Over the past decade, research explaining cross country income differences has increasingly pointed to the dominant role of total factor productivity (TFP) gaps as opposed to factor accumulation. Nevertheless, it is a widely held belief that a country's ability to absorb and implement technologies is tied to its human capital. In this paper, we implement this idea in a novel specification and explore its quantitative implications within a development accounting framework. In our model, intermediate goods production takes place over a range of industries, and human capital ratios in a country influence industry specific productivities asymmetrically. As a result, in human capital abundant countries, production is concentrated around industries with high TFP, while in low human capital countries, production is concentrated around industries with low TFP. Development accounting exercises for a range of parameter values suggest that this human capital-technology complementarity may account for eighteen to twenty five percent of differences in GDP per worker which is higher than the combined direct contribution of factors of production.

We assess the recent economic and financial performance of U.K. private equity (PE) backed buyouts. Our empirical evidence, which is based on thousands of transactions, reveals that PE-backed buyouts achieved superior economic and financial performance in the period before and during the recent global recession, relative to comparable firms that did not experience such transactions. Our regression results imply positive differentials of 5-15% in productivity and approximately 3-5% in profitability for buyout firms, relative to non-buyout firms. Another key finding is that revenue and employment growth for PE-backed firms were positive during the sample period.

Productivity growth in agriculture is essential for the development of the sector. This paper has reviewed the developments in agricultural productivity related to the South Asian countries, namely Bangladesh, India, Nepal, Pakistan, and Sri Lanka. The TFP growth and its contribution in production growth have been summarised for South Asia over the past three decades. Crop-specific TFP growth figures have been updated for India by using more recent micro farm level data for three decades. A discussion and synthesis on changes in TFP and its sources of growth for the major crops, major crop systems, crops and livestock sectors for the countries of South Asia have also been presented. Methodological framework for computation of TFP and its growth has also been presented. Policies towards foodsecure South Asia have been outlined under the sub-heads (i) Arresting deceleration in total factor productivity, (ii) Enhancing yield of major commodities, (iii) Accent on empowering the small farmers, (iv) Environment protection, and (v) Strenghtening of national agricultural research system. This paper would provide useful information to the people intrested in doing research on these issues. Some of the concerns raised in this paper on productivity would provide direction for future research in this area.

There has been a pronounced increase in research and development (R&D) expenditure in Singapore over the last two decades, with government spending accounting for a sizeable share. This increase has been spurred by public policy emphasis on research and innovation as engines of economic growth. This paper analyses the impact of R&D on economic performance in Singapore from 1978 to 2012 through the use of time series analysis. The Cobb-Douglas based analysis shows a long-run equilibrium relationship between Total Factor Productivity (TFP) and R&D investments. We found that the short-run productivity of R&D in Singapore is comparable to smaller advanced economies in the Organisation for Economic Co-operation and Development (OECD). However, in terms of long-run R&D productivity, Singapore lags slightly behind the smaller OECD nations and far behind the G7 countries. This suggests leakage of value capture and low absorptive capacity in local firms. Possibility of productivity improvements induced by policy changes in the 1990s was considered, but no evidence of significant structural breaks was found. Lastly, Granger causality analysis reveals that public sector R&D augments private sector R&D capital, thus playing an important role in generating externalities and spillover effects. Policy implications and lessons for other middle-income countries are discussed.

The household enterprise sector has a significant role in the Tanzanian economy. It employs a larger share of the urban labor force than wage employment, and is increasingly seen as an alternative to agriculture as a source of additional income for rural and urban households. The sector is uniquely placed within the informal sector, where it represents both conditions of

Potential output measures a country's attainable aggregate living standard and is thus one of the most important categories of economics. It is also a key indicator for monetary and fiscal policy. Despite its prominence, however, potential output is a difficult concept to pinpoint theoretically and even more so empirically. The study discusses these difficulties and also the marked revision of

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.

In questo lavoro l'analisi degli spillover si è concentrata sulle esternalità fra le imprese italiane del tipo intra-e inter-industry ed i loro effetti sulla produttività. Le relazioni tra i vari settori sono state approssimate attraverso una matrice degli scambi commerciali. I principali risultati sono i seguenti: − un importante effetto degli spillover intra-industry, con dei rendimenti superiori alla media dei risultati presenti in letteratura. La localizzazione geografica non sembra invece determinare notevoli effetti intra-settoriali. − le stime degli spillover inter-industry mostrano dei risultati all'interno di un range minore di quelli intra-settoriali, con un effetto più netto degli spillover provenienti a monte della catena produttiva (supply-driven) rispetto a quelli customer-driven. In conclusione, le imprese possono sfruttare a scopi produttive conoscenze di altri, a patto che appartengano a settori manifatturieri ad alta intensità tecnologica, che intrattenga rapporti commerciali, sia a monte sia a valle della catena produttiva, con imprese di industrie dinamiche da un punto di vista tecnologico.his study uses firm level data from two detailed surveys of Italian manufacturing

This paper examines the impact of being an innovator on firm productivity in Taiwan. Using a panel of 48794 firms observed over the 1997-2003 period, and distributed across 23 industries, we compute TFP by estimating Translog production functions with conventional K, L, E, M inputs. We evaluate the impact of being an innovator on TFP using propensity score matching. The rationale is that, over the period, innovating firms are likely to have benefited from one of many innovation policy measures known as IUS (until 1999) or "New IUS" (after 1999). The analysis was conducted separately for 1997-1999 and for 2000-2003. Our results show a significantly negative effect of being an innovator on TFP in every 2-digit industry and in both sub-periods. If TFP is defined as the part of productivity unexplained by conventional inputs, then this means that innovation activities explain a significant part of productivity at the firm level.

While barriers to trade in most goods and some services including capital flows have been reduced considerably over the past two decades, many remain. Such policies harm most the economies imposing them, but the worst of the merchandise barriers (in agriculture and textiles) are particularly harmful to the world's poorest people, as are barriers to worker migration across borders. This paper focuses on how costly those anti-poor trade policies are, and examines possible strategies to reduce remaining distortions. Two opportunities in particular are addressed: completing the Doha Development Agenda process at the World Trade Organization (WTO), and freeing up the international movement of workers. A review of the economic benefits and adjustment costs associated with these opportunities provides the foundation to undertake benefit/cost analysis required to rank this set of opportunities against those aimed at addressing the world's other key challenges as part of the Copenhagen Consensus project. The paper concludes with key caveats and suggests that taking up these opportunities could generate huge social benefit/cost ratios that are considerably higher than the direct economic ones quantified in this study, even without factoring in their contribution to alleviating several of the other challenges identified by that project, including malnutrition, disease, poor education and air pollution.

a pivotal member of the team that built the model used here, Bernard Decaluwé and John Cockburn for academic mentorship during the course of this project. Ismaël Fofana provided technical assistance with poverty analysis. Gratitude is extended to Randy Spence for comments on this paper at a PEP conference in Sri Lanka in 2005. We are grateful for constructive comments from an anonymous reviewer and from participants at PEP Network meetings in Senegal (2004) and Sri Lanka (2005). We thank Davison Chikazunga, Wellington Jogo and Charles Nhemachena for research assistance. All remaining errors should be attributed to the authors. The opinions expressed in this paper are the sole responsibility of the authors and do not represent those of the Financial and Fiscal Commission or the University of Pretoria.

The objective of this paper was to explain the greater or lesser growth rate of total factor productivity, TFP, in the main East Asian and Latin American economies between 1960 and 2015. We found econometric evidence favorable to this hypothesis: the increase in public consumption expenditures, given the evolution of other factors, reduces the TFP. Other results of the econometric exercise, those that are related to hypothetical positive effects of public investment and imports on TFP were not as robust or as reliable as we would have expected.

xii summary higher productivity. Simulation 4 examines cases of higher industry TFP in raw cotton, cotton lint and yarn, and textiles in both the short and long run using a dynamic-recursive version of the CGE model. The increase in TFP is welfare-increasing, with dynamic effects and the level of impact among the cotton-textile sectors and across household groups depending on whether productivity improves in one or more of these highly interdependent sectors.

Rice production in Asia needs to increase to feed a growing population whereas water for irrigation is getting scarcer. Major challenges are to (i) save water; (ii) increase water productivity and (iii) produce more rice with less water. This study analyzes the ways in which water-saving irrigation can help to meet these challenges at the ®eld level. The analyses are conducted using experimental data collected mostly in central±northern India and the Philippines. Water input can be reduced by reducing ponded water depths to soil saturation or by alternate wetting/drying. Water savings under saturated soil conditions were on average 23% (AE14%) with yield reductions of only 6% (AE6%). Yields were reduced by 10±40% when soil water potentials in the root zone were allowed to reach À100 to À300 mbar. In clayey soils, intermittent drying may lead to shrinkage and cracking, thereby risking increased soil water loss, increased water requirements and decreased water productivity. Water productivity in continuous¯ooded rice was typically 0.2±0.4 g grain per kg water in India and 0.3±1.1 g grain per kg water in the Philippines. Water-saving irrigation increases water productivity, up to a maximum of about 1.9 g grain per kg water, but decreases yield. It therefore does not produce more rice with less water on the same ®eld. Field-level water productivity and yield can only be increased concomitantly by improving total factor productivity or by raising the yield potential. Total rice production can be increased by using water saved in one location to irrigate new land in another. If this is not done, a strategy of saving water at the ®eld level potentially threatens total rice production at large.

Peningkatan jumlah penduduk serta perubahan pola konsumsi dan selera masyarakat menyebabkan peningkatan konsumsi daging sapi nasional yang dipenuhi sekitar 65% dari produk impor sehingga berpotensi menguras cadangan devisa. Salah satu upaya untuk meningkatkan produksi daging sapi dalam negeri adalah dengan peningkatan produktivitas usaha penggemukan sapi potong.
Penelitian ini dilaksanakan dengan tujuan untuk mengetahui: (1) Hubungan antara umur peternak dengan produktivitas; (2) Hubungan antara jumlah kepemilikan ternak dengan produktivitas; dan (3) Faktor-faktor yang berpengaruh terhadap produktivitas usaha penggemukan sapi potong.
Penelitian dilaksanakan di Kabupaten Ciamis sebagai salah satu sentra peternakan sapi potong di Provinsi Jawa Barat. Ukuran sampel sebanyak 100 peternak di Kecamatan Panjalu dan Cihaurbeuti yang dipilih secara purposif sebagai lokasi penelitian. Data primer yang digunakan berupa data pemeliharaan selama kurun waktu bulan Januari-Desember 2012. Hubungan antara umur peternak dan jumlah kepemilikan ternak dengan produktivitas dianalisis secara kualitatif dengan menggunakan tabulasi silang; sedangkan faktor-faktor yang berpengaruh terhadap produktivitas usaha penggemukan sapi potong dianalisis dengan menggunakan persamaan regresi linier berganda.
Hasil penelitian menunjukkan bahwa: (1) Produktivitas tertinggi sebesar 0,5626 dicapai oleh peternak yang berumur antara 28-38 tahun. Semakin bertambahnya umur peternak, maka semakin menurun produktivitas yang dicapai; (2) Produktivitas tertinggi sebesar 0,9056 dicapai oleh peternak yang memiliki sapi potong sebanyak 5 ekor jika dibandingkan dengan produktivitas yang dicapai oleh peternak yang memiliki 1-4 ekor sapi potong. Semakin banyak jumlah sapi potong yang dimiliki oleh peternak, maka semakin meningkat produktivitas yang dicapai; dan (3) Pendidikan, pengalaman beternak dan jumlah kepemilikan ternak berpengaruh signifikan terhadap produktivitas usaha penggemukan sapi potong.
Kata kunci: sapi potong, produktivitas, faktor-faktor