Technical efficiency analysis correcting for biases from observed and unobserved variables: an application to a natural resource management project

This article brings together the stochastic frontier framework with impact evaluation methodology to compare technical efficiency (TE) across treatment and control groups using cross-sectional data associated with the MARENA Program in Honduras. A matched group of beneficiaries and control farmers is determined using propensity score matching techniques to mitigate biases stemming from observed variables. In addition, possible self-selection arising from unobserved variables is addressed using a selectivity correction model for stochastic frontiers recently introduced by Greene (J Prod Anal 34:15?C24, 2010). The results reveal that average TE is consistently higher for beneficiary farmers than the control group while the presence of selectivity bias cannot be rejected. TE ranges from 0.67 to 0.75 for beneficiaries and from 0.40 to 0.65 for the control depending on whether biases were controlled or not. The TE gap between beneficiaries and control farmers decreases by implementing the matching technique and the sample selection framework decreases this gap even further. The analysis also suggests that beneficiaries do not only exhibit higher TE but also higher frontier output.     

Continuity Under a Different Name: The Outcome of Privatisation in Serbia

Normally, privatisation is seen as beneficial. This paper considers the case of Serbia – a latecomer in the matter – where privatisation was partly a result of exogenous pressures and where the process has been deemed a failure. In Serbia, a sizeable number of privatised firms were bought by bureaucrats and politicians and all firms were subjected to a period of supervision. We argue that the design of this process allowed rent-seekers to conserve their privileges through asset-stripping, which explains the failure. In order to do so, we perform an empirical analysis of the determinants of liquidation, merger and bankruptcy of privatised firms from 2002 to 2015. We construct a novel data set from primary sources, free of the ‘survivorship bias’ and containing proxies for various types of owners, indirect signs of asset-stripping strategy and a broad range of controls. Our results indicate that firms owned by politicians faced significantly higher risks of bankruptcy, especially after the end of supervision.     

TECHNICAL,ECONOMIC, AND ALLOCATIVE EFFICIENCY IN PEASANT FARMING: EVIDENCE FROM THE DOMINICAN REPUBLIC

This paper presents measures of technical (TE), economic (EE), and allocative (AE) efficiency for a sample of sixty peasant farmers in the Dajabon region of the Dominican Republic. Maximum likelihood techniques are used to estimate a Cobb-Douglas production frontier, which is then used to derive its corresponding dual cost frontier. These frontiers are the basis for obtaining farm level efficiency estimates. The results reveal average levels of TE, AE, and EE equal to 70 per cent, 44 per cent, and 31 per cent, respectively. In a second step analysis, two-limit tobit regression techniques are used to estimate three separate equations where TE, EE, and AE are expressed as functions of the following farm/farmer characteristics: contract farming, agrarian reform status, farm size, schooling, producer's age, and household size.     

Technical efficiency and metatechnology ratios for dairy farms in three southern cone countries: a stochastic meta-frontier model

This paper compares technical efficiency (TE) and metatechnology ratios (MTR) for dairy farms from Argentina, Chile and Uruguay using the meta-frontier (MF) approach. The estimated average MTRs for Argentina, Chile and Uruguay are 83.8, 79.6 and 91.4%, respectively, and these results are significantly different from each other. The TEs estimated with respect to the MF are 72.8, 65.8 and 73.4% for Argentina, Chile and Uruguay, respectively. The average TEs for Argentina and Uruguay are not significantly different from each other but are significantly higher than the value for Chile. The production frontiers for Argentina and Uruguay are relatively close to the MF, which suggests that these two countries might need to increase investments to promote local research to generate new technologies and/or search for technologies to adapt from more distant areas. By contrast, Chile could benefit from adaptive research, designed to make borrowed technology from Argentina and/or Uruguay applicable to local conditions, which could be a cost effective way to improve dairy farm performance.     

How effective are level-based R&D tax credits? Evidence from the Netherlands

This article examines the impact of the R&D fiscal incentive programme on R&D by Dutch firms. Taking a factor demand approach, we measure the elasticity of firm R&D capital accumulation to its user cost. Econometric models are estimated using a rich unbalanced panel of firm data covering the period 1996 to 2004 with firm specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we perform a cost–benefit analysis of the R&D incentive programme. We find some evidence of additionality suggesting that the level based programme of R&D incentives in the Netherlands is effective in stimulating firms’ investment in R&D. However, the hypothesis of crowding out can be rejected only for small firms. The analysis also indicates that the level based nature of the fiscal incentive scheme leads to a substantial social deadweight loss.     

Multilevel Information Presentation Strategy and Customer Reaction: An Empirical Investigation in an Online Setting

This study investigates the use of polyinstantiated information in management of customer relationships. Polyinstantiation can be used to present different information to different customers who are segmented according to some criterion, such as prior purchase behavior. An empirical study shows that presentation of multilevel benefits information affects customer satisfaction with the offer and information quality which, in turn, affect the overall Web satisfaction. This effect is independent of and comparable in size to the effect of customer prior attitude toward the Web and the Internet. Although the present study employs a Web-based retail setting, the relationships between this information presentation approach and measures of user/consumer satisfaction need not be limited to retail scenarios or to online interactions. We discuss the applicability of this technique of information control to different types of interactions between organizations and their constituents.     

Macroeconomic Fluctuations and Bank Lending: Evidence for Germany and the Euro Area

Abstract. This paper analyzes the dynamic response of loans to the private sector and of economic activity to aggregate supply, demand and monetary policy shocks in Germany and the euro area based on a standard macroeconomic VAR using sign restrictions to identify the structural shocks. The main results of this analysis are that (i) with the exception of the response to the supply shock in Germany, the response of loans to the three macroeconomic shocks is rather weak and in most cases insignificant; (ii) the 2000–05 credit slowdown and weak economic performance in Germany were primarily driven by adverse supply shocks; and (iii) the marked slowdown in credit creation in Germany over this period actually represents a realignment of the outstanding stock of loans with its deterministic level. In order to assess the role of bank lending in the transmission of macroeconomic shocks, we further perform counterfactual simulations and analyze the dynamic responses of German loan subaggregates in order to test the distributional implications of potential credit market frictions. These exercises do not indicate that credit market frictions play an amplifying role in the transmission of macroeconomic fluctuations.