A Stochastic Frontier Analysis of Output Level and Growth in Poland and Western Economies

This paper uses Bayesian stochastic frontier methods to measure the productivity gap between Poland and Western countries that existed before the beginning of the main Polish economic reform. Using data for 20 Western economies, Poland and Yugoslavia (1980–1990) we estimate a translog stochastic frontier and make inference about individual efficiencies. Following the methodology proposed in our earlier work, we also decompose output growth into technical, efficiency and input changes and examine patterns of growth in the period under consideration. This revised version was published online in July 2006 with corrections to the Cover Date.     

The prospect of decent work,decent industrial relations and decent social relations in China: towards a multi-level and multi-disciplinary approach

Abstract

Decent Work is a key initiative launched by the International Labour Organization in 1999. The initiative is to promote decent and productive employment with decent conditions of freedom, equality, security and human dignity. In reviewing academic literature on decent work, existing studies have been conducted primarily from a legal and political economic perspective. It is also largely situated outside any national industrial relations framework, both theoretically and practically. Decent work is an advocacy initiative of ILO, but the promotion of universal values embodied in the notion (e.g. equality, fairness, justice and dignity) needs to be tailored to specific societal contexts. Drawing on existing academic literature, this review article examines ideological, institutional and cultural distances between decent work and the reality of employment in China. It argues that achieving decent work requires an ideological transition of ‘traditional’ Chinese work ethics and a cultural transition from collectivism and altruism towards individualism and an emphasis on individual rights. This study also examines and highlights regulatory enforcement deficits and the inadequate role of the trade union in facilitating the advancement of decent work at various levels. Finally, the article argues that the study of decent work should be mainstreamed as an integral part of decent industrial relations and ultimately, decent social relations. It calls for a multi-level and multi-disciplinary approach to examining the historical, political, economic, ideological and cultural context of specific countries in fulfilling the ‘Decent Work’ agenda.     

Cost efficiency of insurance firms in Ghana

The huge infrastructural deficit in Africa requires the establishment of an efficient insurance industry in the pursuance of economic development. Unfortunately, global statistics reveal low patronage of insurance in developing countries, thus making its impact limited in the region. To position the industry for economic development, this study utilizes the stochastic frontier technique to undertake a thorough analysis on the cost efficiency of insurers from the perspective of developing economies using Ghana as a case study. The results on the 30 insurers studied from 2005 to 2014 indicate that insurers in Ghana operate with about 53.8% average cost inefficiency. This stands to confirm the long existed low performance perception of Ghanaians about the industry. Factors identified to explain the cost inefficiencies were firm size, market share, capitalization, reinsurance, regulation, and business type. Several policy recommendations that can help boost the cost efficiency of insurers were derived from the results.     

A framework to measure the relative socio-economic performance of developing countries

This research develops a framework to estimate the relative efficiency of developing countries in utilizing both their domestic and external resources to achieve the Millennium Development Goals. The analysis highlights distinct efficiency differences across lending groups and geographic regions e.g. between Sub-Saharan Africa and Latin America. The performance of regions exposed to natural disasters and political violence need to be analyzed individually and risk management ought to be an integrated part of development policy. The gap between the Millennium Development Goals and human rights approaches is then examined. Finally, we qualify a country's performance level as potentially sustainable in terms of human, social and environmental welfare, in turn searching for realistic benchmarks and intermediate targets for the relatively inefficient countries. Principal component analysis in combination with data envelopment analysis was applied to solve the problem of efficiency overestimation with multi-dimensional scaling used to present the issue graphically. In summary, the aim of this work is not to rank countries in a league table rather to provide a framework that combines economic, environmental and social issues in order to search for sustainable, pragmatic benchmarks, pushing the boundaries of the Human Development Index.     

An examination of the cost efficiency of banks in Taiwan and China using the metafrontier cost function

Using the stochastic metafrontier framework of Battese et al. (J Prod Anal 21:91–103, 2004), this study proposes to compare and measure the cost efficiency and cost frontier gap between the banking industry in Taiwan and China. It further identifies environmental variables that determine bank’s cost frontier gap between two countries. Data on 69 sample banks for years 2005–2009 are used in the empirical analysis and inference. The empirical results show that Taiwanese banks have in general the superior cost frontier of production, but inferior cost efficiency of operation than Chinese banks. Private banks in Taiwan have the best cost frontier, whereas foreign banks in China are most cost efficient among all banks in Taiwan and China. The empirical results also reveal that the majority of Taiwanese banks are undersized and that most banks in China are oversized. Finally, the regression results show that the financial market structure, institutional environment, and political development are significant determinants of the cost gap between the cost frontiers of banks in Taiwan and China. Therefore, programs related to changes directed toward a better bank production environment can be initiated to improve the cost technologies of banks in both Taiwan and China.     

Efficiency analysis of social protection expenditure in the Italian Regions

The attention and demand for greater social protection is increasing among the populations of all European countries. It is difficult to identify which of the structures and infrastructures, sectors and regional budgets are inefficient and/or negligent in respect of providing more social protection. In the political sphere the problem is examined from a qualitative point of view, because it is essential to have a valid decisional support system that provides useful information for structural and economic intervention programs devised to improve social protection. Regional spending on social protection is a fundamental component of individual well-being. This work is precisely aimed at assessing individual well-being in terms of technical expenses efficiency in the Italian Regions. Stochastic frontier analysis and a nonparametric deterministic model structure are the tools used to investigate the social protection determinants in the paper.     

Determinants of discretionary fiscal policy in Central and Eastern Europe

This paper explores economic, political and institutional determinants of discretionary fiscal policy in 11 Central and Eastern European (CEE) countries from 2000 to 2013 and compares discretionary fiscal reactions before and during the global economic crisis. We find that fiscal policy was procyclical to the output gap both before and during the crisis, while no fiscal reaction to the absorption gap was captured. Our results also indicate a negative relationship between the level of public debt and deficits over the entire period and the pre-crisis period, suggesting that rising public debt represented a brake on future deficits. We also find that election cycles affect the fiscal deficit, but only during the pre-crisis period, while no evidence of a relationship between fiscal policy and government fragmentation was captured. We find some evidence that in the pre-crisis period the CEE countries with a fixed exchange rate regime ran lower deficits than those with a floating regime, whereas during the crisis no impact of the exchange rate regime on the fiscal deficit was found. There is also some evidence that an arrangement with the IMF was associated with lower deficits for the entire sample period. However, no impact of EU accession on the fiscal stance was identified.     

Social dumping and relocation: is there a case for imposing a social clause?

Public opinion in Europe seems worried about the relocation of production plants toward low wage countries often accused of practicing ‘social dumping’. To reduce the incentives for relocation trade unions proposed the adoption of ‘social clauses’ protecting domestic markets from commodities produced in countries where minimal labor condition are not met. We analyze the effects of the adoption of a social clause in a vertically differentiated Bertrand duopoly. We assess how such a policy affects firms’ relocation decisions in order to be able to assess its welfare implications. We also characterize the optimal social clause policy, both under domestic welfare maximization, and from an efficiency point of view. While we show that a social clause policy cannot be dismissed on domestic (or world) welfare grounds, its case is weaker the higher is the domestic wage and the lower is the foreign wage.     

Income growth in the 21st century: Forecasts with an overlapping generations model

We forecast income growth over the period 2000–2050 in the US, Canada, and France. To ground the forecasts on relationships that are as robust as possible to changes in the environment, we use a quantitative theoretical approach which involves calibrating and simulating a general equilibrium model. Compared to existing studies, we allow for life uncertainty and migrations, use generational accounting studies to link taxes and public expenditures to demographic changes, and take into account the interaction between education and work experience. Forecasts show that growth will be weaker over the period 2010–2040. The gap between the US and the two other countries is increasing over time. France will catch-up and overtake Canada in 2020. Investigating alternative policy scenarios, we show that increasing the effective retirement age to 63 would be most profitable for France, reducing the gap between it and the US by one third. A decrease in social security benefits would slightly stimulate growth but would have no real impact on the gap between the countries.     

Inclusion of disabled people in the Italian labour market: an efficiency analysis of law 68/1999 at regional level

Law 68 of March 12, 1999, whose aim is the regulation and promotion of the employment of persons with disabilities, delegates to the regions the management of the labour market. Consequently, its successful implementation depends almost exclusively on the regions’ actions and ability to efficiently coordinate the various actors involved in the work integration of disabled people. The main objective of this paper is to verify which Italian regions are ranked among the most efficient ones in the application of this law. To this purpose, the efficiency analysis is carried out by applying the Data Envelopment Analysis (DEA) method to Italian regions data for the year 2005. In this context, we implement a “cascade” analysis by introducing both environmental variables and social capital variables in different steps of the analysis. The results show that the sheer presence of potential employers and of employment offices is not enough to make a region able to correctly apply the law 68/1999. Both environmental and socio-welfare factors have to be considered, as they are important in determining the efficiency of each region in providing employment for disabled people. Hence, the present study represents an additional source of useful information to policy makers for future economic policy actions in order to promote the integration of disabled people in the labour market: environmental and social capital variables ought to be included as policy instruments within the context of law 68/1999.     

Using Occupational Preference in Estimating Market Wage Discrimination: the Case of the Gender Pay Gap

ABSTRACT Past occupational preference is used to estimate the gender pay gap. The use of predetermined variables in a reduced-form wage equation avoids the bias caused by using variables that are correlated with the random error. Using a gender coefficient, the potential discriminatory gap is about 11.5 percent when past occupational preference is included. Decomposition yields an estimate of 10.5 percent when past occupational preference is included. In both cases, the discriminatory gap is close to that obtained when actual occupation is included. This suggests public policy directed toward reducing hiring discrimination by gender might be misdirected.     

Incorporating sustainability indicators into a computable general equilibrium model of the scottish economy

In recent years, the notion of sustainable development has begun to figure prominently in the regional, as well as the national, policy concerns of many industrialized countries. Indicators have typically been used to monitor changes in economic, environmental and social variables to show whether economic development is on a sustainable path. In this paper we endogenize individual and composite environmental indicators within an appropriately specified computable general equilibrium modelling framework for Scotland. In principle, at least, this represents a very powerful modelling tool that can inform the policy making process by identifying the impact of any exogenous policy change on the key endogenous environmental and economic indicators. It can also identify the effects of any binding environmental targets on economic activity.     

C. Van Tuyckom, & K. J?reskog, “Going for gold! Welfare characteristics and Olympic success: an application of the structural equation approach.” Quality & Quantity (in press)

Winning medals at the Olympic Games has become an objective that countries worldwide want to achieve. In line with research devoted to the predictors of success, the present article examines the connection between certain welfare characteristics (political, social, and economic development) and the probability of success in the 1984 and 2004 Olympics. We expected to find that structural macro conditions still predict Olympic success. Using welfare indicators as formative instead of reflective indicators (Bollen, Qual Quant 183: 77–85, 1984, p. 65), the results of our Structural Equation Model reveal that both economic and social development had an effect in 1984, as well as in 2004. Political development was only significant in 1984. As for the control variables, population size was significant in both 1984 and 2004. Sporting tradition and geographical conditions had no effect at all. The model fit is very good with a chi-square of 6.62 with 5 degrees of freedom (p =  0.25).     

Investigating the role of emissions trading policy to reduce emissions and improve the efficiency of industrial green innovation

Rapid economic development usually leads to serious environmental pollution problems. In order to solve the problem of pollutant emission in sustainable industrial development, it is urgent to examine the implementation effect of emissions trading policy (ETP) and its impact on green industrial development. This study adopts China's ETP as a case study and selects provincial panel data from 2004 to 2018. We first use a non-radial, non-directed, slack-based measure-directional distance function (SBM-DDF) to measure industrial green innovation efficiency. Then we use a difference in differences (DID) model to empirically test the emissions reduction effect of China's policy and whether it promotes industrial green innovation. Thereafter, results show that: (1) the ETP reduces sulfur dioxide (SO₂) emissions indicating the effectiveness of the policy; (2) the policy significantly improves industrial green innovation efficiency, meaning it promotes the sustainable development of the economy; (3) heterogeneity analysis highlights that ETP produces greater benefits for the most polluted regions of China which have more strict environmental regulations. The study examines the effect of emissions trading policy implementation from a new perspective. The study also provides a reference point for China to further refine its policy mechanisms and for other countries to formulate suitable ETP.     

The Effect of Income Distribution on the Ability of Growth to Reduce Poverty: Evidence from Rural and Urban African Economies

The present study examines the extent to which income distribution affects the ability of economic growth to reduce poverty, based on 1990s data for a sample of rural and urban sectors of African economies. Using the basic‐needs approach, an analysis‐of‐covariance model is derived and estimated, with the headcount, gap, and squared gap poverty ratios serving as the respective dependent variables, and the Gini coefficient and PPP‐adjusted incomes as explanatory variables. The study finds that the responsiveness of poverty to income growth is a decreasing function of inequality, albeit at varying rates for the three poverty measures: lowest for the headcount, followed by the gap and fastest for the squared gap. The ranges for the income elasticity in the sample are estimated at: 0.02–0.68, 0.11–1.05, and 0.10–1.35, respectively, for these poverty measures. Furthermore while, on average, the responsiveness of poverty to income growth appears to be the same between the rural and urban sectors, there are substantial sectoral differences across countries. The results suggest the need for country‐specific emphases on growth relative to inequality.     

Cost and profit efficiency of conventional and Islamic banks in GCC countries

Using stochastic frontier approach, this paper investigates the cost and profit efficiency levels of 71 commercial banks in Gulf cooperation council countries over the period 1999–2007. This study also conducts a comparative analysis of the efficiency across countries and between conventional and Islamic banks. Moreover, we examine the bank-specific variables that may explain the sources of inefficiency. The empirical results indicate that banks in the Gulf region are relatively more efficient at generating profits than at controlling costs. We also find that in terms of both cost and profit efficiency levels, the conventional banks on average are more efficient than Islamic banks. Furthermore, we observe a positive correlation of cost and profit efficiency with bank capitalization and profitability, and a negative one with operation cost. Higher loan activity increases the profit efficiency of banks, but it has a negative impact on cost efficiency.     

Are multi‐resort ski conglomerates more efficient?

This paper compares the efficiency of large ski resort conglomerates with independent ski resorts using data on four countries (Canada, France, United States, Switzerland). Using the stochastic frontier production approach, I find that ski resorts that are owned and managed by the Intrawest group are significantly more efficient than independent ski resorts. The efficiency gap is about nine percentage points on average. The remaining ski resort conglomerates (American Skiing, Vail Resorts Inc., and Compagnie des Alpes SA) do not operate more efficiently than independent ski resorts. Copyright © 2009 John Wiley & Sons, Ltd.     

Relating Macro-economic Efficiency to Financial Efficiency: A Comparison of Fifteen OECD Countries Over an Eighteen Year Period

This paper examines the role of the banking sector in the overall economic activity and its contribution to the convergence/divergence in fifteen OECD countries over the time period of 1980–1997. We resort to a non-parametric technique (DEA) and estimate a world wide macro-economic as well as a worldwide banking frontier. We find a very similar pattern in the evolution of banking and macro-economic efficiency. We further study the evolution of the macro-economic and banking productivity and discover, in both cases, convergence over time. Our first finding is that the performance of the banking sector helps to explain the overall economic performance. Our second finding is that the financial orientation of each country constitutes a relevant feature for the last mentioned explanation.     

Are China's HSR tariff affordable and economic equitable? An international comparison perspective

While the issues of high-speed rail (HSR) tariff and its impact on equity have always been a hot topic in China, which also attracted the attention of international researchers, research on the level of HSR tariff from the perspective of individual affordability and equity issue have scarcely been considered. This study therefore aims to fill the research gap by quantifying the HSR relative tariff level and its impact on income/regional distribution via introducing a HSR affordability index.Based on the index, we calculate the HSR affordability levels of the main international sample countries with the order of magnitude. Then we expand the analysis of HSR affordability level according to differentiated HSR pricing practice in the selected countries. At the same time, we compare the HSR tariff impact on economic equity among different countries, regions, and social classes.The result indicates that although the absolute level of HSR tariff is low, China is generally in the middle/the lowest and unbalanced position among the sample countries on HSR affordability in terms of expensiveness and economic equity. When we considered the differentiated tariff policy implemented in Europe and Japan, the affordability gap between China and the other countries is further enlarged. Moreover, inequitable distribution of HSR affordability between different income groups and social classes are found larger not only within China, but also higher when compared to the other sample countries.Finally, we conclude that China should implement differentiated HSR pricing system at a larger scale and greater extent based on the Ramsey pricing and Yield management principle to grasp the additional revenue from the high level income group/the developed region and alleviate the economic equity as well. Meanwhile, we also suggest the balance between HSR affordability for passengers themselves and the macro financial affordability for the country as a whole should also be considered in the future HSR pricing regime formulation.     

Injury-related absenteeism and job satisfaction: insights from Greek and UK data

Most of the literature on absenteeism suggest that absence from work is a complex issue influenced by multiple causes, both of personal and of organizational nature. Job satisfaction has also been identified as one of the factors affecting an employee's motivation to work attendance. There is no universal agreement concerning the relationship between absenteeism and job satisfaction. Some research have found no correlation between these two variables, whereas other studies indicate a weak relationship between these two variables. It has also been suggested that absence and job satisfaction might be more strongly related under some conditions, for instance in the case of blue-collar workers. There is a lack of attention in the literature, however, to injury-related absenteeism, which is a particular type of absenteeism. This paper attempts to fill this gap and examines the effect of job satisfaction on injury-related absenteeism by using Greek and UK data. The empirical results suggest that there is a negative relationship between injury-related absenteeism and job satisfaction. The paper also discusses possible policy measures towards reducing injury-related absenteeism.