Is the Efficiency Wage Hypothesis Valid for Developing Countries? Evidence from the Turkish Cement Industry
The efficiency wage hypothesis is tested by using one of the recently developed methods to measure technical efficiency. We use panel data on 40 Turkish cement plants for the period 1980-1995. The predictions of the efficiency wage hypothesis are tested in two ways: estimation of wage augmented production frontiers and the simultaneous estimation of a production function together with inefficiency effects. Our empirical analysis shows that the wage level is one of the significant factors contributing to the output and technical efficiency of plants in the cement industry in Turkey.
|Date of creation:||Apr 1998|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0)1227 827497
Web page: http://www.kent.ac.uk/economics/
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harry J. Holzer, 1989.
"Wages, Employer Costs, and Employee Performance in the Firm,"
NBER Working Papers
2830, National Bureau of Economic Research, Inc.
- Harry J. Holzer, 1990. "Wages, employer costs, and employee performance in the firm," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 43(3), pages 147-164, February.
- Levine, David I, 1992. "Can Wage Increases Pay for Themselves? Tests with a Production Function," Economic Journal, Royal Economic Society, vol. 102(414), pages 1102-15, September.
- J Konings & Patrick Paul Walsh, 1993.
"Evidence of Efficiency Wage Payments in UK Firm Level Panel Data,"
CEP Discussion Papers
dp0138, Centre for Economic Performance, LSE.
- Konings, Jozef & Walsh, Patrick P, 1994. "Evidence of Efficiency Wage Payments in UK Firm Level Panel Data," Economic Journal, Royal Economic Society, vol. 104(424), pages 542-55, May.
- Holzer, Harry J & Katz, Lawrence F & Krueger, Alan B, 1991. "Job Queues and Wages," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 739-68, August.
- Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-25, March.
- Cappelli, Peter & Chauvin, Keith, 1991. "An Interplant Test of the Efficiency Wage Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 769-87, August.
- Leonard, Jonathan S, 1987.
"Carrots and Sticks: Pay, Supervision, and Turnover,"
Journal of Labor Economics,
University of Chicago Press, vol. 5(4), pages S136-52, October.
- Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June.
- George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1988. "Job Switching and Job Satisfaction in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 495-594.
- Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
- George E. Battese & Sohail J. Malik & Manzoor A. Gill, 1996. "An Investigation Of Technical Inefficiencies Of Production Of Wheat Farmers In Four Districts Of Pakistan," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1-4), pages 37-49.
- Orszag, J. Michael & Zoega, Gylfi, 1996.
"Wages ahead of demand,"
Elsevier, vol. 53(3), pages 341-347, December.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- Richard E. Caves, 1992. "Industrial Efficiency in Six Nations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031930, August.
- Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Lawrence F. Katz, 1986.
"Efficiency Wage Theories: A Partial Evaluation,"
NBER Working Papers
1906, National Bureau of Economic Research, Inc.
- Wadhwani, Sushil B & Wall, Martin, 1991.
"A Direct Test of the Efficiency Wage Model Using UK Micro-data,"
Oxford Economic Papers,
Oxford University Press, vol. 43(4), pages 529-48, October.
- Wadhwani, S. & Wall, M., 1988. "A Direct Test Of The Efficiency Wage Model Using Uk Micro- Data," Papers 313, London School of Economics - Centre for Labour Economics.
- Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
- Perelman, Sergio, 1995. "R&D, Technological Progress and Efficiency Change in Industrial Activities," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(3), pages 349-66, September.
- Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
- Weiss, Andrew W, 1980. "Job Queues and Layoffs in Labor Markets with Flexible Wages," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 526-38, June.
- Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
When requesting a correction, please mention this item's handle: RePEc:ukc:ukcedp:9810. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tracey Girling)
If references are entirely missing, you can add them using this form.