Technical Efficiency Change Research Articles

Evaluating the CO2 performance of China's non-ferrous metals Industry: A total factor meta-frontier Malmquist index perspective

China is the world's largest producer and consumer of non-ferrous metals, and the non-ferrous metals industry is energy- and emission-intensive. The CO2 emissions of the industry have increased nearly four times from the level in 2000 to reach 310 million tons in 2014. To cope with the issues of CO2 emission and other environmental problems under the background of low-carbon development, it is necessary to analyze the CO2 emission performance of China's non-ferrous metals industry. Based on group heterogeneity, this paper uses data envelopment analysis to calculate the Shephard distance function and then uses the Shephard distance function and non-parametric meta-frontier methods to construct the meta-frontier Malmquist CO2 emission performance index (MMCPI) of China's non-ferrous metals industry during the period 2006–2014. The index is further decomposed into three parts: technical efficiency change, technological progress change and technological catch-up effect. The results showed that the MMCPI of China's non-ferrous metals industry exhibits an upward trend during the review period. The improvement in CO2 emission performance is most significant in the central region, followed by the eastern and western regions. Based on the decomposition of MMCPI, the effect of technological progress are significantly different for the different regions, indicating that more targeted policies are need for different regions.

Productivity, technical efficiency and technological change in French agriculture during 2002-2015: a Färe-Primont index decomposition using group frontiers and meta-frontier

ABSTRACTThe objective of the article is to assess productivity change in French agriculture during 2002–2015; namely, total factor productivity (TFP) change and its components – technological change and efficiency change. For this, we use the Färe-Primont index which verifies the multiplicatively completeness property and is also transitive, allowing for multi-temporal and -lateral comparisons. We investigate the extent of heterogeneity within each type of farming sub-sample in terms of TFP change, with the help of the Herfindahl-Hirschman index (HHI). In addition, to compare the technologies among the five types of farming considered, we extend our analysis to the meta-frontier framework. Results indicate that during 2002–2015, all farms experienced TFP progress. The smallest average increase was experienced by the dairy farms and the largest by the field crop farms and the beef farms. The latter had the strongest technological progress but a deterioration in efficiency, while the opposite was found for field crop farms. The analysis of HHI reveals that sheep or goat farms are the most homogenous in terms of the direction of TFP change experienced over the period 2002–2015. The meta-frontier analysis shows that field crop farms’ technology is the most productive of all the types of farming.

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

Applying the Färe–Primont index, this paper computes the total factor productivity (TFP) index for microfinance institutions (MFIs) in terms of its six individual components: technical change, technical, scale and mix efficiency changes and residual scale and residual mix efficiency changes. We use panel data of 342 MFIs from 61 countries covering the period 2003–2013. Results show that MFIs are operating at a low level of productivity with an overall annual rate of decline in TFP of 1.7 percent. Although technical progress, technical efficiency change and mix efficiency change components of TFP have increased over the study period, overall, TFP actually declined over time due to declining scale efficiency, residual scale-efficiency and/or residual mix efficiency changes. We found variations in regional performance with Sub-Saharan Africa experiencing the highest decline in TFP despite improvements in technical and mix efficiency changes. In contrast, Eastern Europe, Central Asia and South Asian regions have experienced a growth in TFP. Policy implications of these results are that MFIs should continue to pursue technical progress and aim to improve technical, scale and mix efficiency components by reallocating resources optimally. As well, MFIs should operate at an optimal scale and derive economies of scope by changing input and output mixes.

Productivity Analysis of Grape by Cultivation Types using MPI

The purpose of this study is to analyse the productivity changes of grape by cultivation types. A Data Envelopment Analysis based Malmquist Productivity Index (MPI) was adopted using Income Survey data of Agricultural Products (2001 to 2015) from the Korean Rural Development Administration. MPI was decomposed into technical efficiency change and technical change. Technical efficiency change was further decomposed into pure technical efficiency change and scale efficiency change. The analysis results are summarized as follows. First, the MPI of open-field grape shows an annual increase of 0.5%. Technical efficiency was decreased at a CAGR of 0.1%, while technical change increased at a CAGR of 0.5%. Second, the MPI of greenhouse grape shows an annual increase of 4.7%. Also, technical efficiency and technology level were increased at a CAGR of 0.3% and 4.4%, respectively. The results of this paper may provide useful information for the background and cause of grape farmers’ closing orchard

Using AHP, DEA and MPI for governmental research institution performance evaluation

ABSTRACTUnder situations of limited resources, soft powers such as technology development and innovation become critical capabilities for a nation’s continuous growth and sustainability. Therefore, we used analytical hierarchy process (AHP), data envelopment analysis (DEA), and Malmquist productivity index (MPI) to evaluate the performance of research projects in 6 main fields of study managed by the Ministry of Science and Technology (MOST) in Taiwan from 2002 to 2012. Among the 6 fields of study, Agriculture and Humanities were two research fields as efficiency; and the sequence of inefficiency 4 fields were sociology, medicine, science, and engineering. Although the field of sociology was inefficiency, it was the only field show continuous growth in result of MPI analysis. Taking the fields as a whole, the result of the analysis of total factor productivity showed recession. However, as seen from the growth in technical change and in scale efficiency change, the MOST was effective to a certain extent during the period. However, the recession in technical efficiency change showed that further improvement in the planning and distribution of manpower and funds is needed.

Impact of policy reforms on the productivity growth of Indian coal mining: A decomposition analysis

Globalisation of the mining sector in India effectively began in 2005 in the form of opening up the sector for foreign direct investment (FDI) fully. This liberalisation has been criticised by some researchers, while some others have argued that the liberalisation has improved the productivity growth of the coal mining sector. These arguments necessitate further empirical analyses to gauge the productivity growth before and after the liberalisation. In this context, the paper analyses the sources of total factor productivity (TFP) growth in a decomposed formulation for the coal mining sector in India during 1988–2014. Further, a comparative analysis of TFP growth has been made by splitting the whole period into pre-liberalisation (1989–2005) and post-liberalisation (2006–2014) of the mining sector. It is found that technical efficiency change has significantly improved from 1.65% during 1989–2005 to 3.09% in 2006–2014, while technical progress has shown no such improvement even after opening up the sector fully. Thus, it calls for the attention of policymakers to enhance investment in technological upgradation as well as scale of operation of coal mining sector in India.

Convergence in the Chinese airline industry: A Malmquist productivity analysis

Our paper examines the productivity levels of Chinese airline market over the period 2006–2016 using Malmquist productivity indexes. Applying a decomposition technique on the estimated productivity index we decompose airlines' productivity levels into technological, pure technical efficiency and scale efficiency change components. The results signify that the reforms made on the Chinese airline industry have forced the airlines to enhance both their catching-up ability and their innovation capacity. This in turn is reflected on their estimated productivity levels. Then in a second stage analysis we utilize the methodological framework by Phillips and Sul (2007, 2009) and we test for the existence of convergence clubs among the estimated productivity components. The results verify the hypothesis of convergence among airlines' technological change and pure technical efficiency levels identifying distinct convergence clubs. The estimated relative transition paths reveal the insights of the enhanced competition among the Chinese airlines.

Knowledge economy and industry performance in China: a provincial level analysis

ABSTRACTWe construct a framework for investigating the effects of knowledge on industry performance. Using Chinese provincial industry data from 2000 to 2012, we decompose total factor productivity (TFP) change into the four components of embodied technical change, disembodied technical change, scale efficiency change, and technical efficiency change. Our results show a considerably stronger positive effect of advanced knowledge on production technology than of basic knowledge. International knowledge spillovers, particularly trade-induced spillovers, are more effective in inducing TFP growth than domestic spillovers. Our analysis further illustrates a discrepancy in TFP growth rates between regions, and we find TFP of the Central and West Region to be catching-up with the East Region. On average, scale efficiency change is the major contributing factor to regional disparities in TFP change. We discuss several policy implications of our results.Abbreviation: Advanced knowledge (ADV); Share of agriculture (AGR); Basic knowledge (BAS); Chinese Industrial Census (CIC); Data envelopment analysis (DEA); Disembodied technical change (DTC); Embodied technical change (ETC); Foreign direct investment (FDI); Gross domestic product (GDP); Population density (POD); Scale efficiency change (SEC); Stochastic frontier analysis (SFA); International spillovers from foreign countries (SPF); Cross-sectoral external knowledge spillovers within China (SPH); Neutral technical change (TC); Technical efficiency (TE); Technical efficiency change (TEC); Total factor productivity (TFP); International trade (TRD); Degree of urbanization (URB)

Domestic market competitiveness of Indian drug and pharmaceutical industry

This paper attempts to analyse the competitiveness of Indian drug and pharmaceutical industry in the domestic market where multinational pharma companies are entering and expanding in a big way, especially after enforcement of product patent regime in 2005. The study applied data envelopment analysis model to estimate relative efficiency and productivity changes in 141 Indian pharmaceutical firms during 2000–2001 to 2012–2013 which encompass pre- and post-product patent regimes. The present study found negative impact of Product Patent Act on the efficiency scores. The technological change factor is found to have played positive role in the growth of productivity, whereas technical efficiency change depicts the judicious utilization of input resources for improving performance. A sensitivity analysis with the inclusion of R&D expenditure in input variables, confirmed the validity of our selected variables. It found marginal bearing of new patent regime on the efficiency of R&D active firms, though it was found to have significantly impacted efficiency scores of large firms, R&D intensive firms, and group-owned firms. The study reported that large size, R&D intensive, private-foreign owned and those engaged in drug formulations exhibit better performance. Further, it is found that ownership, capital imports intensity and size have a positive and significant relationship with efficiency scores, whereas the age, time dummy and size square variables are inversely related. The results suggest that Indian firms need substantive improvements in efficiency by adopting best managerial practices, ensuring optimum utilization of resources, and investing significantly in the technology and products innovation.

Is it Factor Accumulation or Total Factor Productivity Explaining the Economic Growth in ECOWAS? An Empirical Assessment

The purpose of this paper is to examine the sources of economic growth for the ECOWAS countries and to disentangle the relative contribution of each source. Malmquist Productivity Index decomposition is used to distinguish between technical efficiency versus technological change. In addition, an OLS and panel regression is used to estimate the contribution of various sources of growth to increases in GDP per capita. The paper concludes that 1) there was a modest increase in Productivity Index in ECOWAS countries (11.1% between 1981 and 2015) and 2) both factor accumulation and total factor productivity drive the economic growth with technological change and efficiency change being significantly greater contributors. Keywords: Total factor productivity, Malmquist Productivity Index Economic Growth, ECOWAS, Fixed Effect, Random Effect

АНАЛИЗ ЭФФЕКТИВНОСТИ ГОСУДАРСТВЕННОЙ ПОДДЕРЖКИ МАЛЫХ ПРЕДПРИЯТИЙ В СУБЪЕКТАХ РФ

<p align="justify">В статье оценивается эффективность деятельности малых предприятий регионов России на основе индекса Малмквиста. По результатам расчетов было выявлено, что в большинстве регионов имеется тенденция к снижению эффективности, начиная с 2014 г. Наилучшее значение изменения технической эффективности в 2015 г. наблюдается в Дальневосточном ФО, наихудшее - в Северо-Кавказском ФО. Снижение эффективности деятельности малых предприятий, возможно, связано с тем, что в 2013 г. произошло резкое сокращение бюджетных расходов на поддержку малого и среднего бизнеса. </font>

Climate change, health care access and regional influence on components of U.S. agricultural productivity

ABSTRACTThis article examines factors driving three components of total factor productivity change (TFPC) in U.S. agriculture – technical change (TC), technical efficiency change (TEC), and scale and mix efficiency change (SMEC). We also examine TFPC and contrast implications derived from the component models with those from a directly estimated TFPC model. Our results show that TC and SMEC are both significantly impacted by innovation through public research and improved human capital through education and health care access. TEC and SMEC are significantly affected by farm size, and the latter is significantly affected by public policy. The ratio of family-to-total labour, terms of trade and precipitation have significant impacts on all three components, but extension has no significant impact on any component. Climate change variables are the most impactful factors on each component as well as on TFPC. While the impact of climate change is heterogeneous across regions and components, its estimated historical impact is most often positive. Nearly all TFPC elasticities estimated directly are qualitatively the same as those calculated from the component models and quantitatively similar.

Regional Differences in Energy and Environmental Performance: An Empirical Study of 283 Cities in China

This paper proposes a new non-radial biennial Luenberger energy and environmental performance index (EEPI) to measure the energy and environmental performance (EEP) change in various Chinese cities. The sources of EEP change, in terms of technical efficiency change and technological change, are examined by Luenberger EEPI. The contributions from specific undesirable outputs and energy inputs to the EEP change are identified by means of the non-radial efficiency measure. The proposed approach is applied to evaluate the EEP of the industrial sector in 283 cities in China over 2010–2014. Factors influencing the emission abatement potential are investigated by employing geographically weighted regression (GWR) model. We find that (1) changes in EEP can be attributed to technological progress but that technological progress slows down across the study period; (2) the soot emission performance experiences a downtrend among four specific sub-performances (i.e., energy, wastewater, SO2 and soot performances) in line with the truth that severe haze happened frequently in China; (3) the best performers begin to move from the coastal to inland cities with the less resource consumption and higher ecological quality; (4) cities with the strongest positive effect in regards to pollution intensity on emission abatement potential are located in the areas around the Bohai Gulf, where air pollution is particularly severe.

DEA Window Analysis with slack-based measure of Efficiency in Indian Cement Industry

In data envelopment analysis (DEA), the concept of efficiency is examined either in radial measure or in non-radial measure. Radial measure gives the proportion or a percentage by which all the inputs (outputs) to be reduced(increased) simultaneously, while as the non-radial measure deals directly with the input output slacks which must be minimized, hence inputs and outputs need not to optimized by same proportion. Radial measures often provide a weak efficiency score while as there is no such case for Non-radial models. The aim of this paper is to employ the non-radial measure(Slack-based model) in DEA window analysis to measure the Technical Efficiency change over years of various Indian cement companies. The research is based on unbalanced panel data of Indian cement companies during the period 2005-15. DEA window analysis is used to determine the efficiency of cement companies and to observe the possibility of changes in the technical efficiency over time. A study is conducted to evaluate the efficiency of cement companies in India in order to identify the sources of inefficiencies and formulate proposals for improving the productivity of those companies and their operations through a three-year window analysis.

A parametric decomposition of hotel-sector productivity growth

In this paper, we decompose hotel-sector total factor productivity growth into components attributable to changes in technical efficiency, scale effect, and technical change. The hotel-sector production Frontier is approximated parametrically using a primal approach requiring no data on output and input prices while permitting the conduction of statistical tests for the various features of the hotel-sector technology. Our empirical model relies on a flexible translog production function which allows to distinguish between Hicks-neutral and factor-biased technological progress. Using this framework, we estimate hotel-sector productivity growth and its components in a sample of 25 European countries from 2008 to 2015. Based on the empirical results, a cross-country comparison is performed and the sources of hotel-sector productivity are discussed. Finally, the implications of the study for hotel operators and policy makers are presented and a set of recommendations is developed for improving hotel sector productivity growth.

Productivity and efficiency at english football clubs: a random coefficient approach

AbstractThis paper analyzes productivity and efficiency of English professional football clubs from 1981–1982 to 2010–2011, using a random coefficient stochastic distance frontier (SDF) model. Our Bayes factor analysis indicates that this model is strongly favored over the commonly used fixed coefficient SDF model. Our empirical results show that clubs in our sample operate at different levels of technical efficiency and technical change. Our further analysis using ordered logistic regression suggests that technical efficiency is more important than technical change in predicting whether clubs in our sample are promoted or relegated.

Productivity changes in Indian steel plants: DEA approach

PurposeThe purpose of this paper is to evaluate the technical efficiency and productivity changes in the integrated steel plants in India over a period of five years.Design/methodology/approachSince this evaluation of integrated steel plants needs consideration of multiple input and output factors, data envelopment analysis (DEA) has been employed including bootstrapping (to account for statistical noise) to evaluate the relative efficiency of the steel manufacturing units. The efficiency and Malmquist productivity indices of a sample of ten integrated steel plants producing around 55 percent of the industry’s output were determined for the period 2008-2013. The results of these changes were further categorized according to the management control, route followed to produce crude steel, size and age of these steel plants, for gaining insights.FindingsThe study finds that private sector steel plants with larger capacity and which have adopted the latest and most modern technologies are more efficient and productive over the study period.Practical implicationsPublic sector steel plants should therefore be provided with more autonomy and delegation of power and should be agiler in responding to market requirements as well as increasing their installed capacities to be competitive in technical efficiency and productivity as well as profitability in the long term to ensure sustainable achievements.Originality/valueProductivity changes over time, both with respect to technological and efficiency changes, for the Indian integrated steel plants producing comparable products using DEA.

Knowledge Economy and Industry Performance in China: A Provincial Level Analysis

We construct a framework for investigating the effects of knowledge on industry performance. Using Chinese provincial industry data from 2000 to 2012, we decompose total factor productivity (TFP) change into the four components of embodied technical change, disembodied technical change, scale efficiency change, and technical efficiency change. Our results show a considerably stronger positive effect of advanced knowledge on production technology than of basic knowledge. International knowledge spillovers, particularly trade-induced spillovers, are more effective in inducing TFP growth than domestic spillovers. Our analysis further illustrates a discrepancy in TFP growth rates between regions. We also find TFP of the Central and West Region to be catching-up with the East Region. On average, scale efficiency change is the major contributing factor to regional disparities in terms of TFP change. From a policy point of view, the government should improve, for example, the level of knowledge through educational programs, and further focus on policies on urbanization or the development of regional centers to develop a competitive labor market, as well as on policies encouraging international trade.

Measuring Efficiency and Productivity Change of Multi-Specialty Private Sector Hospitals in India : A DEA Based Malmquist Productivity Index Approach

This study analyzed the efficiency of 28 un-listed standalone multi-speciality private sector hospitals in India with panel data from 2012-2013 to 2014-2015 using Malmquist data envelopment analysis. The study used number of beds, number of physicians, and number of other medical staff as input variables. Number of inpatients, number of outpatients, and number of major surgeries were used as output variables. While output oriented CCR and BCC models were used to estimate the technical and scale efficiencies, Malmquist productivity index was used to evaluate productivity changes over years in terms of technical efficiency change and technological change. The values by which inefficient hospitals should increase their outputs and/or decrease their inputs were estimated hospital wise across 3 years. The estimations presented current levels of different efficiency parameters and facilitated the overall evaluation of individual hospitals based on the values and their increase/decrease. It was found that the hospitals achieved a moderate productivity growth of 6.3% during the period of the study. The results of the study also provided critical implications for hospital managers.

A Parametric Estimation of Total Factor Productivity and Its Components in U.S. Agriculture

AbstractThe present study aims at improving our understanding of the individual contribution of the components of total factor productivity (TFP) change to U.S. agricultural productivity. A novel sequential primal‐dual estimation routine to calculate TFP change is proposed, using a multi‐output input distance function in the first stage, followed by a cost minimization routine in the second stage. TFP change is estimated as the direct sum of the estimates of technical change, technical efficiency change, allocative efficiency change, input price effects, changes in output markup, and changes in returns to scale in each state. The validity of the proposed methodology is supported by the remarkable overlap and high correlation of our annual estimates of TFP change with the USDA's measures of change in TFP by state. Although technical change tends to be the largest contributor to productivity change, it bears a low and statistically insignificant correlation with TFP change on an annual basis, whereas annual changes in the markup effect and returns to scale are highly and significantly correlated with TFP changes. This is the first study to find a slowdown of technical progress in the U.S. farm sector in the 1990s and 2000s, and technical regress during the farm crisis of the 1980s. While technical efficiency shows a positive overall trend, allocative efficiency shows a negative overall trend, and their combined effect (i.e., the overall cost efficiency) slows down TFP growth. The policy recommendations from previous studies on the drivers of TFP should be revised in light of these findings.