Energy efficiency in transition economies

This article outlines and estimates a measure of underlying efficiency in electricity consumption for an unbalanced panel of 27 transition economies and 6 European OECD countries between 1994 and 2007. A Bayesian Generalized True Random Effects stochastic frontier model with persistent and transient inefficiency is considered by estimating an aggregate electricity demand function that leads to consumption efficiency scores, giving further insights than a simple analysis of energy intensity. There is evidence of convergence between the CIS countries and a block of Eastern European and OECD countries, although other country groups do not follow this tendency, such as the Balkans.     

Looking at the determinants of efficiency in banking: evidence from Italian mutual-cooperatives

Italy has experienced a restructuring and consolidation process in the banking industry since the 1990s that is expected to foster efficiency and competition. Despite the reforms, a peculiarity of the industry is the persistence of small mutual-cooperative banks (Banche di Credito Cooperativo, BCCs) active in narrow markets. The scope of this paper is to analyze the determinants of BCCs’ efficiency in the 2006–2011 period. In the first step of the study, a stochastic cost frontier is used to yield bank efficiency. Then the cost efficiency becomes the dependent variable of fixed and random effect models. The reference market of BCCs is the province (NUTS3). We find that BCC cost efficiency is positively affected by market concentration and demand density and inversely related to branching. Importantly, these results are robust to any sample restriction anchored to the distribution of efficiency. While the evidence regarding the credit quality is inconclusive for all BCCs, the sensitivity analysis shows that the risk in local markets is a source of BCC cost inefficiency.     

Determinants of bank cost efficiency in transition economies: evidence for Latin America,Central and Eastern Europe and South-East Asia

In this study, we adopt Wang’s (2002) heteroscedastic stochastic frontier model, which allows us to investigate bank cost efficiency and to measure the marginal effects of some variables on both the level and the variability of inefficiency. In recent years, the financial crisis has significantly affected the banking systems of the transition countries. Hence, the efficiency is of major importance for the stability of the banks. Regarding the determinants of efficiency, we find evidence that banks that follow a more cautious strategy, characterized by lower risk appetite and average expectations on profitability, have higher cost efficiency. We also find that traditional deposit-taking and loan-making still remain the most efficient activity of the banks. Additionally, the results showed that a higher Gross Domestic Product growth rate implies an increase in the inefficiency level, indicating an unsustainable bank management behaviour, which in periods of economic growth adopts policies that can generate inefficiency in order to gain market share and to obtain higher bonuses. Country cost efficiency results show significant differences. The banking systems in transition countries in South Eastern Asia appear to have a higher cost efficiency level. Also, the effects of the financial crisis were less significant in this region.     

The causal effect of coalition governments on fiscal policies: evidence from a Regression Kink Design

Proportional election systems are widespread across countries and often lead to coalition governments. This creates interest in how the form of government (single-party or coalition governments) causally influences fiscal policies. It is difficult to estimate this causal effect empirically because the form of government is not randomly assigned to political units. I overcome this problem by using a Regression Kink Design which exploits that there is a slope change in the treatment probability at the 50% vote share of the strongest party. This method is applied to a large panel data set of German local governments. I find that contrary to the theoretical prediction, coalition governments significantly decrease expenditures.     

An analysis of the impact of unionization on efficiency: evidence from a meta-frontier analysis

This article examines the impact of unions on the efficiency of establishments in the manufacturing industry by comparing the results from two different empirical strategies: stochastic frontier analysis (SFA) and meta-frontier analysis (MFA). While SFA concludes that union establishments show higher technological efficiency, the results are the opposite when estimating production functions with MFA. In SFA, unionized establishments appear to be more efficient because they remain closer to their own production frontier; however, in MFA – where groups with heterogeneous technology can be compared – we find that nonunionized establishments are more efficient because they are closer to the meta-frontier than their unionized counterparts.     

Public and private inputs in aggregate production and growth: a cross-country efficiency approach

In a cross section of OECD countries, we replace the macroeconomic production function by a production possibility frontier, total factor productivity being the composite effect of efficiency scores and possibility frontier changes. We consider, for the periods 1970, 1980, 1990 and 2000 one output – GDP per worker – and three inputs – human capital, public physical capital per worker and private physical capital per worker. We use a semi-parametric analysis, computing Malmquist productivity indexes, and we also resort to stochastic frontier analysis. Results show that private capital is important for growth, although public and human capital also contribute positively. A governance indicator, a nondiscretionary input, explains inefficiency. Better governance helps countries to achieve a better performance. Nonparametric and parametric results coincide rather closely on the movements of the countries vis-à-vis the possibility frontier and on their relative distances to the frontier.     

The effects of agglomeration economies on technical efficiency of manufacturing firms: evidence from Indonesia

This article examines the effects of agglomeration economies and industrial structure upon firm-level technical efficiency in the Indonesian manufacturing industry over the period 2004–2009. A stochastic production frontier and three channels of agglomeration economies consisting of specialization, diversity and competition are used. The empirical results show that the effects of specialization and diversity upon firm-level technical efficiency are positive and negative, respectively, indicating that specialization is more favourable than diversity for stimulating firms’ technical efficiency. Competition has a positive sign, showing that region with high levels of competition tend to be more conducive in accelerating firm-level technical efficiency. In terms of firm location, both dummy for urban region and industrial complex turn out to be positive, indicating that firms located in both areas are experienced higher technical efficiency. Both firm size and age also have positive effect upon technical efficiency.     

Financing constraints and investment efficiency: evidence from a panel of Canadian forest firms

This article examines the financial constraint of 18 listed Canadian forest firms between 2000 and 2014 following the stochastic frontier approach. Empirical results support the observation that Canadian forest firms have a strong dependence of using both equity financing and debt financing as the coefficients of both equity and debt financing mean functions are significant at 1% level. The distribution of investment efficiency index (IEI) of all 18 firms demonstrates a loss of around 40% of the rate of investment due to financing constraints. Regional analysis demonstrates that the time-varying patters of IEI of three provinces are significantly different.     

Information technology,efficiency and productivity: evidence from Korean local governments

This study evaluates the performance of Korean local government by measuring their technical efficiency (TE) and total factor productivity (TFP) growth and, more importantly, examining the impact of information technology (IT) on this performance. The study is different from received analysis in that a unique measure of the state of IT–the Informatization Index–is used to investigate the impact of IT on both TE and TFP growth. Empirical analyses are conducted on data from 222 Korean local governments for the period 1999 to 2001. In particular, data envelopment analysis techniques are applied to calculate TE scores and TFP growth rates for sampled local governments. The empirical findings confirm the positive impact IT has in improving technical efficiency and accelerating productivity growth. The estimated coefficients are correctly signed (with other regional characteristics controlled for) when TE scores and TFP growth rates are regressed on the Index. In addition, the findings indicate that economies of density are present in the production of local public services.     

Reforming the local public sector: economics and politics in privatization of water and solid waste

Several empirical studies have analyzed the factors that influence local privatization. We examine the influence of transaction costs and political factors on local governments’ choices through new variables. We consider two relevant services accounting for different amounts of transaction costs: water and solid waste delivery. Our results show that privatization is less common for water, which has higher transaction costs. Furthermore, we find that municipalities with a conservative ruling party privatize more often regardless of the ideological orientation of the constituency. Finally, we find that intermunicipal cooperation may be a suitable organizational form for some municipalities.     

Market-related reforms and increased energy efficiency in transition countries: empirical evidence

Energy efficiency improvement is a desirable response to growing climate change and security of energy supply concerns. This article studies the impacts of a varied set of macro-level market-oriented reforms as well as structural change on economy-wide measure of energy efficiency across a group of the transition countries. These countries experienced a rapid marketization process, which, since the early 1990s, transformed their economies from central planning towards market-driven models. We use a bias-corrected fixed-effect analysis technique to estimate this effect for the period 1990 to 2010. The results suggest that reforms aimed at market liberalization, financial sector and most infrastructure industries drove energy efficiency improvements. We find significant differences in improvements in energy efficiency between transitional Central European and Baltic States, South East Europe ones and the Commonwealth of Independent States. The reasons for these differences are also discussed.     

Elasticity of substitution and technical efficiency: evidence from the US electricity generation

ABSTRACT

The implications of national or regional energy policies for technical efficiency and environmental outcomes in electricity generation depend on fossil fuel input substitution. This study uses state level data to examine fossil fuel (coal and natural gas) substitution in electricity generation under increased availability of natural gas in the United States. We observe that changes in elasticities of substitution from pre-2009 to post-2009 differ across states suggesting that the effects of increased availability of inexpensive natural gas on electricity generation have been spatially heterogeneous. We rely on the observed heterogeneity to assess the effects of fossil fuel input substitution on technical efficiency and CO₂ emissions. The results reveal that state level elasticity of substitution between natural gas and coal has a positive effect on technical efficiency and a negative effect on CO₂ emissions. Therefore, future policy design and analyses should reflect the implications for regional elasticities of fossil fuel substitution and associated environmental outcomes.     

军费开支、治安水平与随机内生增长

建立一个随机宏观模型,考虑到军费开支和治安水平,采用随机最优化的方法,把军费开支作为宏观经济变量并进入个人效用和生产函数,得到经济达均衡时军费开支、个人收入的风险对治安水平的影响。同时求出最优的增长率和个人资本与财富比、消费和财富比。     

Financial liberalization,financial regulation and bank efficiency: a multi-country analysis

This article investigates the impact of financial reforms on bank efficiency. More specifically, we distinguish between two different types of financial reforms, i.e. financial liberalization measures and measures of the quality of bank regulation and supervision (i.e. financial regulation), and study their relationship to bank efficiency separately. Moreover, we analyse whether the impact of financial liberalization on bank efficiency is conditional on the quality of regulation and supervision of the banking system. We apply stochastic frontier analysis to calculate bank efficiency at the individual bank level and use a new and detailed database that measures different aspects of financial reforms. The data-set consists of 87 312 bank-year observations covering 61 countries for the period 1996–2005. Overall, we show that the impact of financial liberalization policies on bank efficiency is conditional on the extent to which bank regulation and supervision has been adopted and developed.     

Natural resource windfalls and efficiency in local government expenditure: Evidence from Peru

We study the role of natural resource windfalls in explaining the technical efficiency of public expenditure. Using a rich dataset of expenditure and public good provision for 1836 municipalities in Peru for the period 2001–2010, we estimate a nonmonotonic relationship between the efficiency of public good provision and the level of natural resource transfers. Local governments that were extremely favored by the boom in mineral prices were more efficient in using fiscal windfalls, whereas those that only benefited from modest transfers were more inefficient. These results can be explained by the increase in political competition associated with the boom. However, the fact that increases in efficiency were related to reductions in public good provision casts doubts on the beneficial effects of political competition in promoting efficiency.     

The Brazilian Soccer Championship: an efficiency analysis

This article analyses the top Brazilian football league from 2003 to 2011 by estimating a cost function and using a stochastic frontier model. Among the covariates, the number of fans per club and club remoteness is taken into account. The Brazilian clubs are then ranked according to their technical efficiency during the 2000–2011 period. Based on the results, the policy implication is presented, and the economic implications arising from the study are also considered.     

Trade liberalization and technical efficiency in the Indonesian chemicals industry

This article examines the impact of trade reform on technical efficiency on the Indonesian chemicals industry using firm-level panel data. The effects of trade reform on technical efficiency are analysed using a stochastic frontier approach. Two variables represent trade reform in this model: effective rate of protection (ERP) and import ratio (IMP). The findings of the present study suggest that both trade reform variables have significant effects on technical efficiency. The coefficient of ERP has a positive sign and is statistically significant, which means that an increase in ERP increases the inefficiency (or decreases the technical efficiency) of firms in the chemicals industry. The coefficient of IMP is negative and statistically significant, which represents the negative impact of IMP on technical inefficiency (or positive on technical efficiency). Thus, trade reform, a reduction in ERP or an increase in IMP, has an unambiguously positive effect on technical efficiency in the Indonesian chemicals industry.     

公共支出对我国技术效率的影响分析

文章首先应用随机前沿方法,估计了我国31省市的时变随机前沿生产函数模型,结果表明提高公共支出占GDP的比例能显著地降低技术效率,而提高公共支出的组成部分占GDP的比例对技术效率有显著的促进作用,其现实意义就是优化公共支出结构对我国的技术效率有促进作用.其次,计算了我国31省市的技术效率,结果发现东部与西部之间的技术效率差距较大,而且在进一步扩大之中.再次,对TFP变化率进行了分解,分析表明:不论是从全国还是从东中西部三地区看,对技术效率影响最大的因素都是规模经济性,而技术进步和资源配置效率影响较小.最后,根据我国目前以规模经济性对TFP变化率为主要影响因素的实际情况,指出从公共收支视角来提高技术进步和资源配置效率对TFP变化率的影响,缩短东西部技术效率的差距,是一条高效率的公共支出发展之路.     

Efficiency,heterogeneity and cost function analysis: empirical evidence from pathology services in the National Health Service in England

Pathology services are increasingly recognized as key to effective healthcare delivery – underpinning diagnosis, long-term disease management and research. To the extent that pathology services affect a patient’s treatment pathway, significant healthcare costs are influenced directly by the performance of these services. Given pressures on the UK Department of Health to make efficiency savings and that little is known about the efficiency of pathology laboratories, this area offers unlocked potential for efficiency gains. We adopt a time varying inefficiency model, with laboratory-specific time paths for inefficiency, to identify potential savings in pathology services based on a panel of 57 English laboratories over a 5 year period. We apply a range of approaches to account for observable and unobservable heterogeneity between laboratories. We find potential efficiency savings of 13% in pathology services in this sample, which implies the potential for an annual saving of £390m in pathology across the NHS. Our study also provides valuable insights into the impact of a range of factors influencing laboratory costs.     

Estimation of the efficiency of structural funds: a parametric and nonparametric approach

This article seeks to perform an analysis of the efficiency of the application of the structural funds in the regions classified as Objective 1 over the period 2000 to 2006, applying the techniques known as Data Envelopment Analysis (DEA) and stochastic frontier. In the first place, we are going to identify which are the most efficient regions. Finally, we will analyse the extent to which certain factors have repercussions on the efficiency such as country, geographical location and contribution of agriculture of Gross Domestic Product (GDP) and the result indicates that some of these variables have significantly influences of technical efficiency.