Efficiency, productivity, and scale economies in the U.S. property-liability insurance industry

The paper examines efficiency, productivity and scale economies in the U.S. property-liability insurance industry. Productivity change is analyzed using Malmquist indices, and efficiency is estimated using data envelopment analysis. The results indicate that the majority of firms below median size in the industry are operating with increasing returns to scale, and the majority of firms above median size are operating with decreasing returns to scale. However, a significant number of firms in each size decile have achieved constant returns to scale. Over the sample period, the industry experienced significant gains in total factor productivity, and there is an upward trend in scale and allocative efficiency. More diversified firms and insurance groups were more likely to achieve efficiency and productivity gains. Higher technology investment is positively related to efficiency and productivity improvements.     

A new decomposition and interpretation of Hicks-Moorsteen productivity index for analysis of Stock Exchange companies: Case study on pharmaceutical industry

This paper deals with the productivity index based on Hicks-Moorsteen (HM) productivity index for analysis of Stock Exchange firms. In this paper, a decomposition of Hicks-Moorsteen productivity index is provided that uses data envelopment analysis (DEA) models. On the other hand, it is offered a new interpretation and decomposition for components of HM productivity index that in previous studies were not performed any interpretation of it. These components have named the output production and the input consumption in terms of changing the efficiency frontier. In addition, by comparing the components of HM productivity index and productivity value, the optimal values of output production and input consumption are determined. Also, the analysis is determined how to identify the optimal value of a firm over a period of time. The proposed approach is applied to 26 pharmaceutical manufacturers that are from Tehran Stock Exchange. Data have been collected for six consecutive years (2009–2014) and have been considered financial ratios for evaluating companies. The results show that the Hicks-Moorsteen productivity index is more able to provide managerial aspects than other productivity indexes such as the Malmquist productivity index.     

The effect of innovation efficiency management on performance: Differences according to organizational size

The efficiency associated with innovation has been a frequently considered element in the literature. However, the conceptualization of this efficiency and its management is an underexplored factor. We study the way in which the different elements that conform to this efficiency are managed over time. From a dynamic efficiency analysis using data envelope analysis (DEA) and the Malmquist productivity index, we evaluate changes in efficiency and if there are differences according to firm size. Our results confirm the relevance of size in the way that firms manage their innovation efficiency and how small firms differ from larger ones in terms of efficiency management.     

Productivity indexes under Hicks neutral technical change

The Malmquist and Hicks–Moorsteen productivity indexes are the two most widely used theoretical indexes for measuring productivity growth of firms, industries and countries. We indicate that these two indexes coincide under constant returns to scale technology and Hicks neutral technical change. While the conditions on production technology under which two indexes coincide have been examined before, this is the first study on the types of technical change under which they coincide. We shed new insight on the relationship between these popular indexes.     

The biennial Malmquist productivity change index

In this paper we introduce a new Malmquist productivity index that has three attractive features: it avoids linear programming infeasibilities under variable returns to scale, it allows for technical regress, and it does not need to be recomputed when a new time period is added to the data set. The proposed index is compared to both the adjacent Malmquist index and the global Malmquist index in an empirical example, which highlights the drawbacks of the existing indexes compared to the proposed biennial Malmquist index.Our results show that 13% of the observations in the data set may have to be ignored due to infeasibilities when decomposing the adjacent Malmquist index. Using only this reduced data set does at times lead to quite different results than those generated by applying the proposed biennial Malmquist index to the entire data set. The empirical example also shows that productivity change estimated between two time periods using the global Malmquist index change substantially when a third time period is added to the data set, whereas the proposed biennial Malmquist index is immune to this problem.     

Measuring productivity growth, technical progress, and efficiency changes of CPA firms prior to, and following the Sarbanes–Oxley Act

This paper investigates productivity growth, technical progress, and efficiency change for a group of the 56 largest CPA firms in the US from the period 1996–1999 through the period 2003–2006, where the former preceded, and the latter followed, enactment of the Sarbanes–Oxley Act (SOX). Data envelopment analysis (DEA) is used to calculate Malmquist indices of three measures of interest: productivity growth, technical progress, and efficiency change. Results indicate that CPA firms, on average, experienced a productivity growth of approx. 17% from the pre- to post-SOX period. Consistent with the finding of Banker et al. [Banker RD, Chang H, Natarajan R. Productivity change, technical progress and relative efficiency change in the public accounting industry. Management Science 2005;51:291–304], this productivity gain can be attributed primarily to technical progress rather than a change in relative efficiency. In addition, results indicate that the “Big 4” firms underperformed their non-Big 4 counterparts in both productivity growth and technical progress.     

On approximating the Indirect Malmquist Productivity Indices by Fisher indices

In this paper it is shown that under certain assumptions the Cost Indirect Malmquist Productivity Index, which is a natural productivity measure for a cost constrained firm, can be approximated as the ratio of the Fisher output quantity index and the cost index.The views expressed in this paper are those of the author and do not necessarily reflect the policies of Statistics Netherlands.     

全要素生产率与人力资本--基于中国经验数据的实证研究（1979-2010）

本文旨在运用中国数据（1979-2010）检验全要素生产率与人力资本之间存在的经验关系,其研究价值在于首次以较完整数据来总结两者30年来的互动发展。首先运用Malmquist指数法和Cobb-Douglas生产函数推导法估算出该期间中国全要素生产率的贡献率,然后以社会平均教育年限及公共教育经费占GDP比重作为人力资本代表指标,运用计量方法进行实验检验。结果发现,社会教育年限的提高有助于全要素生产率的增加,公共教育经费规模也是影响全要素生产率的重要因素。     

A global Malmquist-Luenberger productivity index

This paper introduces an alternative environmentally sensitive productivity growth index, which is circular and free from the infeasibility problem. In doing so, we integrated the concept of the global production possibility set and the directional distance function. Like the conventional Malmquist-Luenberger productivity index, it can also be decomposed into sources of productivity growth. The suggested index is employed in analyzing 26 OECD countries for the period 1990–2003. We also employed the conventional Malmquist-Luenberger productivity index, the global Malmquist productivity index and the conventional Malmquist productivity index for comparative purposes in this empirical investigation.     

融资约束对企业生产率的影响——基于系统GMM方法的国企与民企差异检验

本文基于2003～2009年中国制造业上市公司面板数据,运用附加融资约束变量的增广生产函数和系统广义矩估计方法,研究国企和民企资金可获得性在影响生产率方面的差异。结果发现,上市公司生产率从总体上看不受制于内源融资,但按所有制分类后,只有民企存在融资约束并显著影响生产率,生产率高的民企通常拥有丰裕的内源资金;进一步按流动性与负债状况分类后仍不改变结论,而且流动性差、负债率高的民企所受约束更加严重。     

The change in productivity of Chinese state enterprises, 1983–1987

This study estimates the change in productivity of Chinese state enterprises during 1983–1987 using a panel data set of 403 firms. A new approach to productivity measurement is used. Under this approach, the production functions can differ arbitrarily across firms, important given the heterogeneity of the sample. The resulting coefficients estimate the marginal products of each factor as well as overall productivity growth. The results suggest Chinese productivity increased by 4.6% per year, with about half of this growth due to the rapidly improving education of the labor force.     

An aggregate quantity framework for measuring and decomposing productivity change

Total factor productivity (TFP) can be defined as the ratio of an aggregate output to an aggregate input. This definition naturally leads to TFP indexes that can be expressed as the ratio of an output quantity index to an input quantity index. If the aggregator functions satisfy certain regularity properties then these TFP indexes are said to be multiplicatively complete. This paper formally defines what is meant by completeness and reveals that (1) the class of multiplicatively complete TFP indexes includes Laspeyres, Paasche, Fisher, T?rnqvist and Hicks-Moorsteen indexes, (2) the popular Malmquist TFP index of Caves et al. (Econometrica 50(6):1393?C1414, 1982a) is incomplete, implying it cannot always be interpreted as a measure of productivity change, (3) all multiplicatively complete TFP indexes can be exhaustively decomposed into measures of technical change and efficiency change, and (4) the efficiency change component can be further decomposed into measures of technical, mix and scale efficiency change. Artificial data are used to illustrate the decomposition of Hicks-Moorsteen and Fisher TFP indexes.     

Do Firms Increase Productivity in Order to Become Exporters?*

Recent studies find that exporters are more productive than non‐exporters and that entry into exporting does not increase firms’ productivity. Thus, firms self‐select into foreign markets. This paper examines productivity before entry into exporting. Using Chilean plant‐level data, we find that productivity and investment increase before plants begin to export. Moreover, productivity of entrants to exporting, but not that of non‐exporters and exporters, increases in response to increases in foreign income, before entry but not after that. The results suggest that the productivity advantage of future exporters may be the result of firms increasing their productivity in order to export.     

Measurement of Productivity Changes: Two Malmquist Index Approaches

The adjacent Malmquist productivity index is compared to the more recently suggested base period Malmquist productivity index. The two index approaches are evaluated with respect to base period dependency, the circular test, and with respect to a set of additional classical index tests. In addition it is shown that the base period index is independent of base period if and only if the marginal rate of substitution of inputs is independent of time. Finally, the adjacent and the base period indexes are put through a Monte Carlo (bootstrap) test to see if they yield similar results when applied to a panel of Swedish pharmacy data.     

The Rise and Fall of Slacks: Comments on Quasi-Malmquist Productivity Indices

Journal of Productivity Analysis - The Malmquist productivity index has been based on ratios of radial Farrell efficiency scores. Calculating these relative to piecewise linear production frontiers...     

Accounting for risk in productivity analysis: an application to Norwegian dairy farming

Empirical studies have often shown wide differences in productivity among firms. Although several studies have sought to identify factors causing such differences, only a few studies have examined the effects of risk and risk aversion on productivity. In this study, using Norwegian dairy farming data for 2009, we examined the effects of different aspects of risk on productivity. We used a range of variables to construct indices of risk taking, risk perception and risk management. These indices were then included as arguments in an input distance function which represents the production technology. Our results show that these risk indices did affect productivity. Regional differences in productivity, though small, were also found to exist, suggesting that unobserved edaphic factors that differ between regions also affected productivity.     

Costly external finance,reallocation, and aggregate productivity

Empirical studies document that resource reallocation across production units plays an important role in accounting for aggregate productivity growth in the US manufacturing. Financial market frictions could distort the reallocation process and hence may hinder aggregate productivity growth. This paper studies the quantitative impact of costly external finance on aggregate productivity through resource reallocation across firms with idiosyncratic productivity shocks. A partial equilibrium model calibrated to the US manufacturing data shows that costly external finance causes inefficient output reallocation from high productivity firms to low productivity firms and as a result leads to a 1 percent loss in aggregate TFP.     

Productivity, returns to scale and product differentiation in the retail trade industry: an empirical analysis using Japanese firm-level data

This paper examines productivity and returns to scale under the assumption of monopolistic competition using Japanese firm-level data. Although differentiating products (services) is considered important in firms?? strategies and productivity growth, it has not been sufficiently investigated in previous studies. In this paper, we study this issue in two retail trade industries, department stores and supermarkets, applying the model of Melitz (2000). Our results indicate that the standard production function is not relevant to estimate productivity in imperfectly competitive markets. It also suggests that the market structure should be carefully considered in productivity analysis. In addition, product differentiation has a positive effect on firms?? revenue for the supermarkets. Furthermore, the retail trade industries possibly follow increasing returns to scale. Thus, policy measures that promote economies of scale and product differentiation should contribute to further growth in these industries. In addition, the results indicate that the regulatory reform of the retail trade industry in 2000 increased the gap between winners and losers in terms of productivity.     

Decomposing multifactor productivity in Italy from 1998 to 2004: evidence from large firms and SMEs using DEA

This paper presents a firm-level analysis of multifactor productivity (MFP) in Italy between 1998 and 2004. Using data envelopment analysis (DEA) technique, MFP change are measured for 31 industries and decomposed into efficiency change and technical change (which in turn is interpreted as the combined effect of technical progress and scale economies). The results highlight the stagnation in many Italian production activities and even a decrease in MFP in some industries. A non-parametric statistical test on the results obtained from DEA reveals that the analysed larger firms have been more likely to perform better in efficiency than the smaller ones. This outcome seems to complement the Schumpeterian view of a relatively high attitude of larger firms towards technological innovation and productivity growth.     

Public support for performing arts. Efficiency and productivity gains in eleven European countries

This paper investigates the importance of public cultural expenditure for the efficiency and productivity of the performing arts (PA) firms. To this aim, we estimate a translog production function using the stochastic frontier approach (SFA), and we obtain the estimates of both technical efficiency and its determinants for the PA firms in EU-11 countries over the period 2009–2017. The large panel data set enables the application of robust true random-effects SFA techniques, which control for noise, unobserved firms' heterogeneity and endogeneity of the inputs. Moreover, by estimating a production function, the characteristics of the production technology in the PA sector is also derived. The empirical results demonstrate that PA firms are technically inefficient, implying that the investigated firms could increase their artistic output between 32 and 42% and that decreasing returns to scale are prevalent, due to the presence of too many micro and large-scale firms in the European PA sector. In contrast to the seminal Baumol and Bowen's [5] paper, we also demonstrate that the total factor productivity (TFP) increased in the EU PA firms over the examined period. Technical efficiency, although relatively low, was the main driver of this productivity growth, as opposed to scale efficiency change or technological change, which display very small or no increases. We also find that, contrary to the common wisdom on its negative effects on firm efficiency, public spending on culture increases the efficiency of PA firms. Within this context some policy implications are discussed.