Dual impact of financialization on total factor productivity: empirical evidence from South Korean non-financial firms (1994–2022)

BackgroundThe pursuit of efficiency and productivity is one of the goals of health systems. In the era of Sustainable Development Goals and particularly the move towards universal health coverage, it is imperative to curb wastage of resources to ensure sustainable access of the population to needed and effective health services without enduring financial hardship. This study aims to assess total factor productivity change of national health systems of 20 countries in the WHO’s Eastern Mediterranean Region.MethodsData Envelopment Analysis (DEA)-based Malmquist index is used to assess total factor productivity change and its components – efficiency change and technical change. To assess the robustness of the Malmquist index estimates, bootstrapping was performed. Outputs used are life expectancy at birth for both sexes and infant mortality; while total expenditure on health per capita in international dollars (PPP) is used as a measure of input. Panel data for the period 2003–2014 was extracted from databases of the WHO and the World Bank.ResultsIn all but five countries covered in the study, a decline in the mean total factor productivity is observed during the period 2003–2014. The decline is driven by technical regress. In all countries, the technical change component of the Malmquist TFP index is less than unity (range: 0.896 to 0.945). All countries exhibited growth in efficiency (efficiency change exceeding one) except two countries (Djibouti and Iraq). The growth in efficiency was mainly due to change in scale efficiency. Overall, total factor productivity in the region declined by 3.8%. This was due to a 9.1% decline in technical change, which overshadowed the 5.8% increase in efficiency. Three countries - Libya, Qatar and Yemen – showed a marginal growth in total factor productivity. There was no change in total factor productivity in Kuwait and Lebanon.ConclusionThe decline in total factor productivity over the study period is likely to hamper achieving the targets of Sustainable Development Goal 3 of ensuring healthy lives and promoting well-being for all at all ages. It is recommended that country-level studies on efficiency and productivity of health systems be conducted in order to intensively examine the determinants of inefficiency and productivity decline and implement appropriate interventions that could enhance efficiency and productivity.

This paper employs the Malmquist total factor productivity (TFP) index to examine the total factor productivity change in the life and non‐life branches of the Turkish insurance sector for the period 2000–2005. The Malmquist productivity index is decomposed into two components: the efficiency change component and the technical change component. The results indicate a decrease of 19.4 % in total factor productivity in the life insurance sector and an increase of 6.1% in the non‐life insurance sector during the sample period. Significant TFP growth in the non‐life insurance sector has occurred during 2003–2005. This growth is seen to be mainly due to the change in production technology. The firms are then split into two groups, domestic and foreign firms, according to their ownership composition. The results indicate a decline in total factor productivity for both groups in the life insurance sector whereas in the non‐life insurance sector, an increase in the total factor productivity of domestic firms is observed.

Double-edged sword: Does strong creditor protection in the bankruptcy process affect firm productivity

In the first essay of our examination of Japanese total factor productivity, “Why Overcoming Deflation Alone Will Not Solve Japan’s Structural Problems,” we examined the role of relative deflation of capital goods in an exogenous model of productivity. In this study we gather empirical evidence on sector-specific characteristics of total factor productivity with the latter as an endogenous variable. Using panel regressions of industry-specific total factor productivity (both adjusted and unadjusted for labor and capital utilization) segmented by sector we discover a positive relationship between industry-wide measures of deregulation and total factor productivity in the services sector. However, the coefficient reverses in the manufacturing sector – a drop in already-deregulated manufacturing is consistent with a decline in total factor productivity. Although the direction of causality is indeterminate, an optimal level of regulation across industries in terms of total factor productivity growth appears to lie somewhere between the manufacturing and non-manufacturing sectors. Separately, we find strong evidence that the share of innovative capital scaled by firms’ output correlates positively with TFP growth, across most industry sectors. The sum of our findings provide a specific policy argument: to prioritize deregulation in services over manufacturing, moreover that the target of such policy adjustments should be at once to incentivize innovation in not only IT-relevant but also non-IT sectors and to dispose of “dead weight” capital in non-IT related Services industries in particular. We supplement the latter claim with empirical evidence of stagnation in the aggregate quality of capital in non-IT versus ITrelated industries and, to a lesser extent, in Services versus Manufacturing.

Changes in total factor productivity and efficiency of microfinance institutions in the developing world: A non-parametric approach

The importance of the expanded interpretation of the economic category “productivity” with the help of the index of “total factor productivity” and “multifactor productivity” has been revealed. The index approach was used to estimate the correlation between the total factor productivity and the cost of resources. The dynamics of the level of total factor productivity of agriculture in Ukraine was shown, which reflects the reduction of the effectiveness of the agrarian sector while increasing the volume of production in absolute terms. A set of factors that influence the productivity of agricultural production was offered. To substantiate the reasons reduced total factor productivity analyzed the dynamics of partial factor productivity, which indicates an increase in labor inputs and soil moisture regime. The approach to the expanded treatment of the economic category “productivity” with the introduction of such notions as “total factor productivity” and “multifactor productivity” has been stated. The methods and approaches to an estimation of multifactorial productivity (MFP) are systematized. A review of the factors and reasoning behind the decline in total factor productivity is provided. Dynamics are investigated and the basic factors of influence on increase of MFP, in particular in agrarian sector of economy of Ukraine are defined.

Several recent studies on total factor productivity (TFP) concluded that the East Asian economies benefited little from TFP growth. This study claims that the failure by previous studies to consider the effect of net indirect taxes and market imperfections resulted in the underestimation of the share of the contribution of labor input to factor income, which consequently led to the overestimation of capital share and understatement of TFP growth. Therefore, this study has modified the conventional approach of calculating factor shares by taking account of net indirect taxes and market imperfections and used the modified approach to estimate TFP growth in 16 Taiwanese manufacturing industries during the period 1979–1999. The conclusion drawn by the study is that TFP growth was the driving force behind the success of Taiwan's manufacturing industries, although many of these industries experienced a sharp decline in TFP during the 1990s.

ObjectivesThe sub-Saharan African (SSA) countries have been recording a decline in total factor productivity (TFP) growth, inadequate health funding and poor health outcomes are regarded as problems that might have...

Limiting fossil fuel usage is seen as essential to combat climate change; however, nitrogen fertilizers (or N-fertilizers) heavily rely on fossil fuels. Disruptions in fossil fuel supply are likely to negatively impact N-fertilizer production, worsening food crises and poverty in underdeveloped regions. In this study, we revisit the Coal Resource Consolidation Campaign (CRCC), an industrial reform campaign that aimed at increasing the mechanization and recovery rates to enhance the Chinese coal industry’s competitiveness but resulted in a shortage of anthracite lump coal supply, the primary feedstock for Chinese N-fertilizer firms at that time. We examine CRCC’s impact on the total factor productivity (TFP) of Chinese coal-based N-fertilizer firms during 2008–2013 using a difference-in-differences model. TFP is decomposed into capacity utilization (CU) and pure TFP. Our findings indicate a significant 33.4–34.2% decline in TFP due to CRCC. Further analysis reveals that a 6.3% decline in CU, not pure TFP, was the primary driver of the TFP loss from 2011 to 2013. We recommend that policymakers should assess the impact of climate change policies comprehensively, and the government should support the adaptation and innovation of feedstock in the N-fertilizer industry to avoid feedstock supply disruptions.

Continuous cotton ( Gossypium hirsutum L.) production was examined using data from Alabama's long‐term Old Rotation experiment (c. 1896). Index values were used to examine trends in productivity and sustainability for 95 yr. Treatments studied were those receiving (i) no N fertilizers and no winter legumes for 95 yr, (ii) only winter legumes as a source of N, and (iii) chemical fertilizer N. Three sets of index numbers were calculated from all inputs and outputs involved in the production systems: (i) total factor productivity (TFP), which accounts for all direct production inputs, but which does not consider production externalities; (ii) productivity relative to a base plot;and (iii) total social factor productivity (TSFP), which accounts for all direct production inputs as well as externalities of soil erosion and pesticide use. Viewed from the 95‐yr perspective of the Old Rotation experiment, all three treatments fulfill at least one criterion required for a system to be considered sustainable. Output per unit of input is higher in 1991 than in 1896, even when externalities are valued. None of the systems showed a linear trend in output or TFP over the life of the experiment;productivity cycles are present in all three systems, despite a positive overall trend. An average annual rate of TSFP growth of 1.8%/yr was attained. Accounting for erosion and pesticide externalities reduced the annual productivity growth rate by 0.2%/yr. The system that has neither an organic nor a chemical source of added N was less productive and less sustainable than the two other systems, with a 0.3%/yr TSFP growth rate. The plots using organic and chemical sources of N had similar productivity impacts. Valuing soil erosion and pesticide externalities had only a modest effect on measured productivity. The most dramatic single event to affect the productivity of cotton farming was the introduction of the mechanical cotton picker. The impact of this technology was powerful enough to offset the effect of many other changes in the system. Research Question Is cotton production in the southeastern USA sustainable? How do we measure sustainability of a crop that has been produced for almost 200 yr in the same region but has a reputation for depleting the soil of nutrients, extensive soil erosion, and high pesticide use? The objective of this study was to use input and output indexes and a calculation of total factor productivity (TFP) to determine if cotton production using different management strategies is sustainable over nearly a century of continuous production. Literature Summary Most researchers agree that a sustainable system should maintain or enhance agricultural production, reduce the level of production risk for the farmer, protect natural resources, be economically viable, and be socially acceptable. Measuring all of these attributes of a production system is very difficult. However, using the extensive data available from historical, long‐term experiments should provide insight as to sustainability of certain production systems. Alabama's Old Rotation (c. 1896) is the oldest continuous cotton experiment in the world. Input and output (yield) records and estimates allow calculation of TFP indexes over the 95‐yr history of continuous cotton production. Different cotton production systems can be compared. Study Description Three continuous cotton systems from the Old Rotation were chosen for comparison: (i) No N and no winter legumes since 1896 (No N), (ii) winter legumes (crimson clover and/or vetch) as the only source of N since 1896 (winter legumes), and (iii) no winter cover crop and 120 lb N/acre as ammonium nitrate since 1956 (N fertilizer). Where input records were not recorded (e.g., labor, costs, machinery, etc.), they were estimated from USDA, Alabama Agricultural Experiment Station, and Alabama Cooperative Extension Service publications. Soil erosion estimates for the three cropping systems on a Pacolet fine sandy loam, were made using Erosion Productivity Index Calculator modeling. Input, output, TFP, and total social factor productivity (TSFP) indexes for 95 yr were calculated. Total social factor productivity includes estimated values for the negative offsite effects of soil erosion and pesticide use. Applied Questions Is continuous cotton production sustainable? Viewed from the 95‐yr perspective of the Old Rotation, the no N, winter legume, and N‐fertilized continuous cotton plots all fulfill at least one criterion required for a system to be sustainable. Output per unit of input is higher in 1991 than in 1896, even when externalities (erosion and pesticides) are valued. The average growth rates on the No N plot are 0.5%/yr for TFP and 0.3%/yr for TSFP. On the winter legume plot, TFP and TSFP grew at a rate of 2.0%/yr and 1.8%/yr, respectively. The plots using organic and chemical sources of N had similar productivity records. None of the systems shows a linear trend in TFP over the history of the experiment. Productivity cycles are present in all three systems, despite the positive overall trend. An important focus of future research will be to explain whether these cycles are related to weather, technology, or changes in the resource base. As one would expect, the system that has neither an organic or a chemical source of added N is less productive than the two other systems. This system compares even more poorly when externality costs are assigned. Organic and chemical sources of N have similar productivity impacts. How have externalities such as soil erosion and the negative impact of pesticide use on the environment affected TFP? Soil erosion and pesticide externalities have had only a modest effect on measured productivity. The no N plot indexes are not changed at all; TFP on the legume and N‐fertilized plots decreased by 4 and 6%, respectively. The main conclusions of the previous question are therefore unaffected. How have technological advancements affected long‐term productivity/sustainability of continuous cotton production? The most dramatic single event to affect productivity was the introduction of the mechanical cotton picker around 1960. The impact of this technology is powerful enough to offset the effect of many other changes in the system. This advancement allowed cotton production to move from a labor‐intensive environment with increasing labor costs per pound of yield to an environment where harvesting costs were not seriously affected by increasing yields. Because technological advancements cannot be predicted into the future, predicting the long‐term sustainability of a system becomes very difficult.

This paper analyzes labor productivity and total factor productivity (TFP) in the industry (C – Manufacturing), construction (F – Construction), and trade (G – Wholesale and retail trade; repair of motor vehicles and motorcycles) sectors in Bosnia and Herzegovina, Serbia, and Croatia. The analysis reveals significant differences both across sectors within each country and between the countries themselves. Bosnia and Herzegovina has the lowest absolute TFP values in the manufacturing and trade sectors but shows potential for growth, whereas in construction, TFP exhibits a negative trend despite high investments. Croatia, although in a better position, shows a decline in TFP in manufacturing and trade, while construction records growth. Serbia is experiencing strong growth in construction and leading in trade, while the manufacturing sector is seeing a slight decline in TFP.

Searching for domestic reserves of economic growth has lately become one of the central problems in Russia. The paper examines the role of small industrial enterprises in stimulating economic growth. In contrast to the stereotype that small business serves as a driving force for the economic development and encourages innovation, the authors hypothesizes that in Russia this statement is false. The conceptual and methodological framework of the study rests upon neo-classical models of economic growth. The authors investigate the existing approaches to the analysis of factors influencing economic growth of the state and choose the tools of total factor productivity analysis. Total factor productivity is calculated using the translog production function, which allows determining the effect of the technological level on value added of the object under study. The choice of the type’s function is due to the low elasticity between the factors of production, as well as the imperfect competition in the industrial markets under review. The information base of the research includes the data of small, medium-sized and large enterprises of 10 industrial macro-sectors of the Russian economy for 2013–2017. We use SPARK-Interfax database to assess production functions. The results of the analysis prove that small enterprises operating in the Russian industry demonstrate much lower values of average and weighted average total factor productivity than medium-sized and large enterprises. The general trend for such businesses is a decline in total factor productivity. Only single leading companies produce a gain in value added in small entrepreneurship. Thus, the economic situation in Russia rejects the hypothesis about a higher entrepreneurial potential of small businesses, business models and technological innovations emerging on its basis. Our further studies are assessing institutional traps and general context in the development of small business.

This paper addresses the performance of public transit systems. It uses the methodology of Obeng and Sakano to decompose total factor productivity (TFP) among its sources. The results show decline in TFP without an accounting for operating and capital subsidies and TFP growth when these subsidies are considered. The contributions of this paper are both methodological and in the empirical evidence it provides.

To examine productivity growth in New Jersey's food-processing sector, this study conducts a joint analysis of total and partial factor productivity indexes. Results indicate growing material intensity, declining labor and capital intensities, and relatively slow material productivity growth. However, due to the high cost share of material inputs, material productivity growth contributed more to total factor productivity growth than did growth in the productivity of any other input. In fact, almost half of the growth in overall productivity is attributed to material productivity growth. Results also suggest that the 1973 decline in total factor productivity was characterized by greater decline in material productivity than in the productivities of labor and capital.

The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the effects of air quality regulations on manufacturing plants' total factor productivity (TFP) levels. We find that among surviving polluting plants, stricter air quality regulations are associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly large negative effects on productivity, though effects are also evident among particulates and sulfur dioxide emitters. Carbon monoxide regulations, on the other hand, appear to increase measured TFP, especially among refineries. The application of corrections for the confounding of price increases and output declines and sample selection on survival produce a 4.8 percent estimated decline in TFP for polluting plants in regulated areas. This corresponds to an annual economic cost from the regulation of manufacturing plants of roughly $21 billion, about 8.8 percent of manufacturing sector profits in this period.