Decline In Total Factor Productivity Research Articles

Effect of Zero Tillage and Different Weed Management Practices in Direct Seeded Rice (Oryza sativa L.) in Indo Gangetic Plains: A Review

Millions of rural and urban residents depend on the rice-wheat cropping system of the Indo-Gangetic plains (IGP) for their food security and means of subsistence. About 18 million hectares (m ha) of rice (Oryza sativa L.) and wheat (Triticum aestivum L.) are rotated across Asia, of which 13.5 m ha are in the Indo-Gangetic Plains (IGP) of India. This agricultural system’s viability is currently in jeopardy due to static yields of both wheat and rice and a decline in total factor productivity. The North West IGP's high input crop culture has allowed weeds to dominate the weed flora, including P. minor in wheat and Echinochloa crus-galli L. in rice. Farmers in North West India have largely used zero tillage for growing wheat, and recently, farmers in the eastern IGP have done the same. Perennial weeds in the Eastern Indo-Gangetic Plain, such Cynodon dactylon L. and Cyperus rotundus L. can occasionally be a nuisance under zero tillage. As an alternative to puddled transplanted rice, the focus is currently on dry direct-seeded rice and machine transplanting of non-puddled rice. As a result of changes in tillage, crop establishment techniques, water use, and weed control brought on by the switch from transplanted rice to direct seeded rice, weed composition and diversity frequently vary. In nations where DSR is frequently used, weedy rice has become a significant concern. Using the Zero Tillage DSR system, certified seed, cultivars that are weed-competitive, stale seedbed procedures, living mulches, and chemical and biological weed control might change weed-crop competition in the crop's favour. However, more research on emergence characteristics and mulching effects of different crop residues on key weeds under zero tillage, cover cropping, and breeding crops for weed suppression will strengthen nonchemical weed management programs. In this review, we examine the extent of weed infestation, weed flora shift and the non-chemical alternative weed management in DSR.

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

Using data from Chinese A-share listed firms from 2015 to 2022, a difference-in-differences model is employed to empirically examine the impact of bankruptcy regimes, marked by the establishment of the bankruptcy court, on firms' total factor productivity (TFP). The results show a significant decline in TFP among firms in regions following the establishment of the bankruptcy court. This result remains valid after a series of robustness tests. Mechanism tests reveal that bankruptcy court heightens firms' risk aversion by endowing excessive rights to creditors. Consequently, firms tend to downwardly adjust capital structure, curtail innovation investment, and accumulate liquid assets as coping measures, ultimately contributing to a decline in TFP. However, well-developed market mechanisms can alleviate the negative impact of bankruptcy court excessively protecting creditors. Specifically, when firms are located in regions with weak government intervention and strong financial development, as well as in market environments with low uncertainty and strong competition, this negative impact can be mitigated. Moreover, we find that under bankruptcy court operations, while a series of risk reduction measures taken by firms triggers a decline in TFP, it mitigates financial distress. These findings provide fresh insights into the dual nature of creditor protection and offer valuable references for governments to improve the bankruptcy legal system.

Integrating the rent gap into the ground rent theory. Measurement and implications for different models of agriculture

The aim of this paper is to establish a conceptual framework for the rent gap theory in agriculture and to identify potential implications of the rent gap for socio-economic processes occurring in agriculture and rural areas. From an empirical perspective an attempt was made to determine the state and dynamics of the rent gap phenomenon in agriculture in Poland, considering the regional division. The authors used income approach and Capital Asset Pricing Model (CAPM) for estimating the capitalization rate. It was found that rent gap is a permanent phenomenon in Polish agriculture, the dynamics of which largely depends on macroeconomic factors. A widening rent gap may result in the withdrawal of land from farming and a decline in total factor productivity in agriculture. Thus, the implications of the rent gap may relate to food security. Measuring the rent gap can be a step towards determining the quasi-market value of environmental amenities of land.

Regional efficiency and total factor productivity change for small and medium sorghum producers in Zambia: A slacks-based measure and Malmquist index approach

Zambia's efforts to promote countrywide production of sorghum is backed by a number of apropos factors. It is not only an adaptive response to the climate change challenge, but also a dietary diversity improvement measure, to achieve food and nutrition security. Further, improved sorghum production will supply emerging agro-industries, especially specialty foods, beverages and stock feed manufacturing in the country. However, regional sorghum production efficiencies in Zambia are not well known. This paper attempts to evaluate regional sorghum production technical efficiencies (TE), as well as Total Factor Productivity (TFP) change from 2011 to 2022. To study these aspects, we apply non-parametric Data Envelopment Analysis (DEA) techniques such as the Slacks-Based Measure (SBM), and the Malmquist Productivity Index (MPI), followed by bootstrap OLS regression respectively. Cross-sectional estimates from the SBM model for the 2022 cropping season indicate that average TE for small and medium sorghum farmers in Zambia was 85 percent. Sorghum production could be expanded by 411.90 t by improving TE in five of ten provinces in Zambia. The MPI shows that TFP for sorghum production in Zambia declined by 21 percent, mainly due to deteriorating sorghum production technology. Populations, rurality, agro-ecological zone IIB are the factors associated with EC and TFP decline.

Effect mechanism and efficiency evaluation of financial support on technological innovation in the new energy vehicles’ industrial chain

Financial support is of crucial importance for driving technological innovation within the new energy vehicle (NEV) industry. By using the data of listed NEV enterprise in China from 2016 to 2020, the panel regression model is employed to explore the effect mechanism of financial support on technology innovation. Furthermore, Data Envelopment Analysis (DEA) and Malmquist index method are applied to assess the financial support efficiency from static and dynamic perspectives, respectively. The results indicate that: (1) Both market-oriented and policy-oriented financial support significantly contribute to technology innovation across the entire NEV industrial chain, with R&D investments playing a critical mediating role. (2) Upstream and midstream enterprises are mainly supported by bank credit, while downstream enterprises rely more on equity and government support. (3) Upstream enterprises have the highest financial support efficiency and stable total factor productivity (TFP), while midstream and downstream enterprises are affected by external environments, leading to a gradual decline in TFP. Finally, it is suggested to enhance the innovation level of the NEV industry through building a multi-level market-oriented financial support system, improving the policy support mechanism and promoting industrial chains coordination development. This study sheds light on the importance of targeted financial support strategies to foster sustainable innovation in the NEV industry.

Total factor productivity and state ownership: Evidence from China's 2008 stimulus package

AbstractWe examine the impact of China's economic stimulus plan in 2008 on the total factor productivity (TFP) of China's listed firms. We hypothesize that firms operating in regions characterized by greater resource misallocation would experience a more pronounced decline in TFP following the implementation of the stimulus plan. To gauge the extent of resource misallocation, we employ the proportion of state‐owned enterprises (SOEs) as a measure. Our findings reveal a substantial decrease in TFP for firms located in provinces with higher SOE shares compared to those in provinces with lower SOE shares, amounting to approximately 9.2%. These results highlight the unintended policy consequence of the stimulus plan for firm‐level productivity in China.

Intermediate service input distortions and total factor productivity: Evidence from China.

China has the most minimal proportion of intermediate service inputs among the input-output datasets encompassing 43 countries and regions within the WIOD database. This study employs a non-parametric estimation methodology to compute the appropriate input levels for two distinct categories of intermediate goods. Furthermore, it evaluates the decline in total factor productivity resulting from distortions in intermediate input. The research findings are as follows: 1) China's producer services exhibit an output elasticity approximately twice that of industrial intermediate goods. However, the input for producer services is only about half of that for the latter. This points to a notable deviation of China's input for producer services from the optimal level. 2) Upon achieving an optimal level of input allocation for intermediates, the entire industry could experience an 11.48% boost in total factor productivity. In particular, the manufacturing sector could witness an impressive surge of 33.91%. 3) A positive correlation is discerned between intermediate input distortions and the import of intermediate products.

What are the effects of monetary policy on productivity?

We assess the effects of monetary policy shocks on total factor productivity (TFP) using a cross-country panel of firm-level data. We find that monetary policy shocks have a significant effect on TFP: a 100 basis points contractionary monetary policy shock is associated with a 112 percent decline in TFP at a 6-year horizon. The effects of monetary policy shocks on TFP are stronger for financially constrained or vulnerable firms. Further, we find support for a credit channel transmission mechanism of monetary policy on TFP in that intangible investment reacts adversely to contractionary monetary policy shocks.

Understanding total factor productivity changes of Chinese N-fertilizer firms during raw material supply disruptions: a capacity utilization perspective

ABSTRACT 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.

Is it worth subsidising the cultural sector? New insights from Italian theatre companies

We study the impact of public subsidies on the efficiency of performing arts through an empirical analysis of Italian theatres (including opera houses, permanent theatres, and theatre production companies), using an output-oriented approach. Firstly, we discuss the previous works on efficiency and its determinants in the presence of public subsidies. Secondly, the stochastic frontier analysis true random-effects model and the IV GMM second stage regressions are used together with a procedure to measure the marginal effects of subsidies. Our findings suggest that the impact of public funds on technical efficiency of the Italian theatrical firms is positive and significant. The elasticity of public subsidy on efficiency is smaller than one. However, the return on subsidies amounts to 87 on average. These returns vary between Italian performing arts sub-sectors, and are very high for theatre production companies, low for permanent theatres, and very low for opera houses. We also find that the technological progress is negative for the theatrical Italian sector and it leads to the decline in total factor productivity over time, providing empirical support to the presence of Baumol’s disease in the sector. Overall, since Italian theatres technical efficiency could be increased at least by 25–27%, policy makers could work on public incentives in such a way as to avoid that, due to asymmetric information between government and theatrical firms, subsidies are provided (and criticised) indiscriminately.

Crop establishment and nutrient management for production sustainability in rice (Oryza sativa)-wheat (Triticum aestivum) system in eastern India

In eastern Indo-Gangetic Plains (EIGP), conventional rice (Oryza sativa L.)-wheat (Triticum aestivum L.) system has led to a decline in total factor productivity, input-use efficiency, and profitability. A three-year (2020–2022) field experiment was conducted at the farmers’ fields in Merha village of Katoriya, Banka, Bihar on a sandy clay loam soil to evaluate the impact of crop establishment and nutrient management on production sustainability in rice-wheat cropping system. Experiments were conducted in a split-plot design and replicated thrice. The main-plot treatment had crop establishment methods, viz. (i) Broadcasting: paddy seed broadcasted manually; (ii) Dry seeding: seed drilled on moist soil; (iii) Drum-seeding: dry-seed planted using drum seeder on moist soil and; (iv) Wet-seeding: sprouted seeds broadcasted on puddle soil with variety Sabour Ardhjal in rainy (kharif) season and 4-wheat crop establishment method, viz. (i) Broadcasting in CT; (ii) Furrow irrigated raised-bed method; (iii) ZT-drill and; (iv) Seed-cum-ferti-drill machine for wheat variety HD 2967 in winter (rabi) season. The sub-plots were allotted four nutrient management treatments, viz. (i) Farmers’ practice (130:40:10 kg NPK/ha); (ii) 100% RDF (120: 60:40 kg NPK/ha); (iii) Soil- test-based nutrient management (100% chemical fertilizer-125:75:40 kg NPK/ha) and; (iv) Soil-test based nutrient management (75% chemical fertilizer-94:56:30 kg NPK/ha+25% FYM-6.2 t/ha) in wheat, and (i) Farmers practice (140:30:10 kg NPK/ha); (ii) 100% RDF (120:60:40 kg NPK/ha); (iii) Soil-test based nutrient management (100% chemical fertilizer-150:75:40 kg NPK/ha); (iv) Soil-test based nutrient management (75% chemical fertilizer-115:56:30 kg NPK/ha+25% FYM-7 t/ha) in wheat. Our results revealed that overall system productivity and profitability were higher by 44 and 155.5% in wet seeding paddy-ZT drill wheat system in comparison to broadcasting methods of rice and wheat. System productivity was significantly higher by 28.8% in soil-test based nutrient management production system as compared to the farmers' practices. Thus, to achieve better system productivity and profitability, crops may be grown with wet seeding paddy-ZT drill wheat with soil-test based nutrient management practices under eastern Indo-Gangetic Plains of eastern India.

Accounting for the role of investment frictions in recessions

AbstractOur business cycle accounting exercise reveals that both capital and investment efficiency declines played a prominent role in accounting for the output downturn during the US Great Recession. The evidence indicates that an increase in firms' investment costs may have played a substantial role during the US Great Recession, consistent with business cycle models in which firms face financial frictions. The negligible role played by the total factor productivity decline in accounting for the output downturn during the US Great Recession found by previous works can be explained by the movement in opposite directions of both labour and capital efficiency. However, we find that labour efficiency falling was the main force driving output downturn in the 1982 recession and the euro area Great Recession.

Allocation Efficiency of Public Sports Resources Based on the DEA Model in the Top 100 Economic Counties of China in Zhejiang Province

Background: The county is the basic unit of national economic and social development, and is also the foothold and starting point of public sports services. Purpose: Taking the top 100 economic counties of China in Zhejiang Province as the research object, this study explores the allocation efficiency and influencing factors of public sports resources in the period of 2016 to 2020. Methods: The output-oriented Super-SBM model, which is used to measure the static efficiency of its public sports resource allocation, is combined with the DEA–Malmquist model to measure the total factor productivity from the perspectives of overall characteristics, regional heterogeneity, and individual differences. Moreover, we objectively evaluate the dynamic evolution and spatiotemporal characteristics of resource quality growth, financial management technology, and allocation efficiency from the horizontal cross-section and vertical time series. Results: (1) The efficiency of allocation of public sports resources in the top 100 economic counties in Zhejiang Province is relatively high, but it presents the characteristics of “extensive” allocation, and the allocation structure is unreasonable. (2) The super-efficiency gradient division of public sports resources shows that Yuhuan City ranks first with a state of super-efficiency allocation; Ruian, Linhai, Wenling, Yiwu, and Haining have a state of high-efficiency allocation; and other regions are characterized by a state of medium- or low-efficiency allocation. (3) The improvement of total factor productivity depends on the catching-up feature of technological efficiency on the production frontier, but it has not yet compensated for the negative effect of the decline of technological progress, resulting in a decline in total factor productivity with an average annual trend of 0.3%. (4) The level of county economic development has a highly significant positive effect on the allocation efficiency of public sports resources, while the per capita sports ground area has a highly significant negative effect on efficiency. The county population density has a highly significant impact, and regional factors have no significant effect on efficiency. Conclusions: The results of this study provide useful insights for the development of sound public sports service improvement policies.

Health and total factor productivity nexus in selected sub-Saharan African countries: quadratic and threshold modelling

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...

DEKOMPOSISI PERTUMBUHAN PRODUKTIVITAS INDUSTRI MANUFAKTUR INDONESIA: PENDEKATAN STOCHASTIC FRONTIER

Productivity growth can be decomposed into its sources, namely technical changes, technical efficiency changes, and business scale changes. The role of each of these sources is important to be studied because Indonesia experienced a decline in total factor productivity (TFP) growth in 1990-2015 which indicates a productivity issue. The results of previous studies by Margono Sharma (2006) and Ikhsan (2007) regarding the decomposition of productivity growth in the manufacturing industry sector in Indonesia using a stochastic frontier approach, there are still disagreement about the contribution of technical changes and technical efficiency changes to TFP growth. This is thought to be caused by differences in the specifications of the technical efficiency models used, namely Battese Coelli (1992) and Lee Schmidt (1993). The two models have different estimation methods, Battese Coelli (1992) use maximum likelihood estimate, while Lee Schmidt (1993) use non-linear least squares. Hence the scalar parameters that determine the pattern of technical efficiency over time (η in Battese Coelli (1992) and θ in Lee Schmidt (1993)) are different.This study uses data for the period of 2003-2014 in the manufacturing industry sector. The results of this study indicate that different technical efficiency model specifications produce a different relative contribution of TFP growth sources. Therefore, choosing a technical efficiency model to decompose TFP growth should be thorough if the results will be used in important policy making.

Assessment of multifactor productivity based on empirical data in the agricultural sector of the economy of Ukraine

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.

The operational performance of fashion companies in the context of the coronavirus pandemic: static and dynamic analyses

PurposeThis study clarifies the operational performance of fashion companies during the coronavirus pandemic. Meanwhile, improvement strategies have been provided in the post-pandemic era.Design/methodology/approachThe static and dynamic perspectives were combined to comprehensively analyze the operational performance of fashion companies before, during and after the COVID-19 outbreak. A comparative analysis among five representative countries was conducted to achieve global conclusions. Additionally, data envelopment analysis (DEA) theory and various DEA models were employed for the analysis.FindingsThe fashion industry has not achieved overall effectiveness. American companies have the best operational performance, followed by European and Chinese companies. In contrast, the impact of the pandemic on American companies was severe, whereas Chinese and European companies showed operational resilience. In addition, the pandemic had a devastating influence on the global fashion industry. This resulted in a decline in total factor productivity, and the main reason was technological regress. Furthermore, labor redundancy is a critical issue for the fashion industry in the post-pandemic era, even if it shows a decrease because of the pandemic.Originality/valueThe existing theory on the fashion industry during the pandemic was improved by expanding the time and geographical dimensions and integrating the advantages of various DEA models. Scientific improvement strategies were presented in the post-pandemic era with application value.

DEKOMPOSISI PERTUMBUHAN PRODUKTIVITAS INDUSTRI MANUFAKTUR INDONESIA: PENDEKATAN STOCHASTIC FRONTIER

Productivity growth can be decomposed into its sources, namely technical changes, technical efficiency changes, and business scale changes. The role of each of these sources is important to be studied because Indonesia experienced a decline in total factor productivity (TFP) growth in 1990-2015 which indicates a productivity issue. The results of previous studies by Margono Sharma (2006) and Ikhsan (2007) regarding the decomposition of productivity growth in the manufacturing industry sector in Indonesia using a stochastic frontier approach, there are still disagreement about the contribution of technical changes and technical efficiency changes to TFP growth. This is thought to be caused by differences in the specifications of the technical efficiency models used, namely Battese Coelli (1992) and Lee Schmidt (1993). The two models have different estimation methods, Battese Coelli (1992) use maximum likelihood estimate, while Lee Schmidt (1993) use non-linear least squares. Hence the scalar parameters that determine the pattern of technical efficiency over time (η in Battese Coelli (1992) and θ in Lee Schmidt (1993)) are different.This study uses data for the period of 2003-2014 in the manufacturing industry sector. The results of this study indicate that different technical efficiency model specifications produce a different relative contribution of TFP growth sources. Therefore, choosing a technical efficiency model to decompose TFP growth should be thorough if the results will be used in important policy making.

Industry-finance integration activities is beneficial to the improvement of business performance of fishery companies—Based on DEA-CCR Model and DEA-Malmquist Model

Fisheries are an essential component of the national economy. The evaluation of fishery enterprises’ business performance helps reveal the fishery industry’s operating efficiency and serve the fishery economy’s sustainable and high-quality development. This study used the data of fishery companies with industry-finance integration on the stock market from 2012-2021 and conducted a comparative study on the business performance of fishery companies with industry-finance integration on the stock market based on the DEA-CCR model and DEA- Malmquist index method. Two main results were revealed (i) the integration of industry and finance was an effective means to improve business performance, and the financial gains from the integration of industry and finance by listed fishery companies improve the overall efficiency and total factor productivity (TFP) of enterprises. (ii) The average TFP of listed fishery companies in China is declining, and technological decline is the main reason for the decline in TFP.

Analysis on Total Factor Productivity and Differences of Industrial Internet Concept Companies

Based on the Malmquist-DEA model and the DEA-BCC model, using the data of 53 industrial Internet-listed companies, the total factor productivity (TFP), technological progress (TC), and technical efficiency changes of the industrial Internet industry were measured from static and dynamic perspectives (EC), and used the coefficient of variation to further analyze the variance variables that measure the differences between enterprises in various subsectors in the industrial Internet industry. The study pointed out that the overall productivity level of the industrial Internet industry in 2015 to 2019 was low, and the fluctuation range was large, especially the sharp drop in productivity in 2016 to 2017, which had a serious impact on the entire industry. At the same time, changes in technical efficiency are the main reason for the decline in total factor productivity after 2015. Among various industries, the Malmquist indices of manufacturing and information transmission, software, and information technology services are all less than 1, and there is little difference in production efficiency and changes between the two. This study provides a reference for the productivity measurement of the industrial Internet industry based on the Malmquist-DEA model and provides practical inspiration for future management activities.