A Comparison of Intercountry Agricultural Production Functions: A Frontier Function Approach

Unlike the work by Hayami and Ruttan in the 1970s, this study utilizes frontier meta- production functions to study intercountry agricultural productivity differences. Technical efficiency differences are examined through estimation of deterministic and stochastic frontiers for 43 countries over 1960, 1970 and 1980. In most cases, developed countries on average have higher technical efficiency levels. However, not all developed countries are fully technically efficient while certain developing countries perform comparably with other developed countries. The results also show that the productivity gap between developing and developed countries has increased over time. Yet there is potential to improve productivity of developing countries, especially by expanding their human capital stock, as indicated by high output elasticities for primary and secondary education and technical education.

Cognitive strategic groups and long-run efficiency evaluation : the case of Spanish savings banks

In the framework of Cognitive Approach, this paper proposes a new method to identify strategic groups (SG) using Data Envelopment Analysis (DEA) methods. Two assumptions are maintained in the SG literature: first, firms grouped together value inputs and outputs similarly, and, second, some degree of stability in those valuations should be identified. Virtual weights obtained from DEA are extremely useful in the valuation of the strategic variables, but a problem emerges when longitudinal analysis is performed. This problem is addressed by defining a long run DEA evaluation. SGs are determined by means of Cluster Analysis, using virtual outputs and virtual inputs as variables and Spanish savings banks as observations. The traditional method of determining SGs by clustering on the original variables is also applied and the results are compared. It is shown that the long run DEA weights approach has advantages over the traditional methodology

Finn Kydland and Edward Prescott's Contribution to Dynamic Macroeconomics: The Time Consistency of Economic Policy and the Driving Forces Behind Business Cycles

Advanced information on the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, 2004Business Cycles; Time Consistency

The Transformation of Macroeconomic Policy and Research

Nobel Prize Lecture December 8, 2004Business Cycles; Time Consistency

Comparing the performance of public and private water companies in the Asia and Pacific region : what a stochastic costs frontier shows

Estache and Rossi estimate a stochastic costs frontier for a sample of Asian and Pacific water companies, comparing the performance of public and privatized companies based on detailed firm-specific information published by the Asian Development Bank in 1997. They find private operators of water companies to be more efficient than public operators. Costs in concessioned companies tend to be significantly lower than those in public companies. The authors show that rankings based on standard indicators are not always very consistent. This paper contributes to that growing literature. The rest of the paper is organized as follows. Section 2 presents the theoretical structure of the cost model estimated. Section 3 provides an overview of earlier studies of the water sector. Section 4 presents the estimates of costs frontiers obtained for a large sample of Asian and Pacific Region water companies, distinguishing between public and private operators. Section 5 compares the performance ranking from efficiency frontier measures to those obtained from productivity indicators. Section 6 concludes.Decentralization,Environmental Economics&Policies,Water and Industry,Economic Theory&Research,Water Conservation,Environmental Economics&Policies,Water Supply and Sanitation Governance and Institutions,Water and Industry,Economic Theory&Research,Town Water Supply and Sanitation

Trade Liberalization and Organizational Choice

We embed a simple incomplete-contracts model of organization design in a standard two-country, perfectly-competitive trade model to examine how the liberalization of product and factor markets affects the ownership structure of firms. In our model, managers decide whether or not to integrate their firms, trading off the pecuniary benefits of coordinating production decisions with the private benefits of operating in their preferred ways. The price of output is a crucial determinant of this choice, since it affects the size of the pecuniary benefits. In particular, non-integration is chosen at "low" and "high" prices, while integration occurs only at moderate prices. Organizational choices also depend on the terms of trade in supplier markets, which affect the division of surplus between managers. We obtain three main results. First, joint product and factor market integration leads to the convergence of organization design across countries. Second, even in the absence of factor movements, the price changes triggered by liberalization of product markets can lead to significant organizational restructuring within countries. Third, the removal of barriers to factor mobility can induce further organizational changes, sometimes adversely affecting consumers, which suggests a potential complementarity between trade policy and corporate governance policy.

The importance of reallocations in cyclical productivity and returns to scale: evidence from plant-level data

Procyclical productivity plays an important role in many models of aggregate fluctuations. However, recent studies using aggregate data to directly measure technology shocks in the Solow residual find that technology shocks are not procyclical. This paper provides new evidence that, due to countercyclical composition changes between producers, the procyclicality of productivity observed in aggregate data may be understated. Using plant-level microdata, this paper finds that the reallocation of output shares across continuing plants, as well as the entry and exit of plants, creates a countercyclical component in aggregate productivity. This paper shows that such composition changes may cause a downward bias in industry-level estimates of returns to scale. The findings of this paper suggest that, without correcting for the countercyclical effects of reallocations, estimates based on aggregate data may not reflect the true cyclicality of technology shocks, which a representative agent faces over the business cycle.Productivity ; Business cycles

Cognitive strategic groups and long-run efficiency evaluation : the case of Spanish savings banks

In the framework of Cognitive Approach, this paper proposes a new method to identify strategic groups (SG) using Data Envelopment Analysis (DEA) methods. Two assumptions are maintained in the SG literature: first, firms grouped together value inputs and outputs similarly, and, second, some degree of stability in those valuations should be identified. Virtual weights obtained from DEA are extremely useful in the valuation of the strategic variables, but a problem emerges when longitudinal analysis is performed. This problem is addressed by defining a long run DEA evaluation. SGs are determined by means of Cluster Analysis, using virtual outputs and virtual inputs as variables and Spanish savings banks as observations. The traditional method of determining SGs by clustering on the original variables is also applied and the results are compared. It is shown that the long run DEA weights approach has advantages over the traditional methodology.