Measuring technical efficiency in the Greek agricultural sector

This paper measures the degree of technical efficiency of Greek farms at discrete points in time. Stochastic frontier production functions are estimated from four annual Farm Accountancy Data Network (FADN) surveys of the 1992–1995 period. From the results, a measure of technical efficiency is calculated for each farm for each year. The four distributions of technical efficiency values are examined and compared. All four samples show a wide range of farm-specific technical efficiency but efficiency is improving over the period. The paper also presents frontier estimates for small and large farms classified according to economic size. In that case, technical efficiency measures are calculated and their distributions are examined and compared. The results show that large farms are more efficient than small farms. However, efficiency is improving in both size farms over the period. In general, the results of this study indicate that there is substantial scope for improving technical efficiency of Greek farms.     

Measuring technical efficiency and productivity growth: a comparison of SFA and DEA on Norwegian grain production data

This article compares data envelopment analysis and stochastic frontier analysis to assess efficiency and productivity growth of Norwegian grain producers. Previous studies have dealt with either one of them and less of both. For the assessment of productivity growth or regress, Malmquist productivity indices are derived from both approaches. The data cover a 10-year period. We find consistency between the approaches to the extent that: (1) there are potentials for efficiency improvements, but the magnitudes depends on the model applied and by segmentation of the data set, (2) there has been a productivity improvement in the sector, on average in the interval 30–38% in the period studied and (3) technical change has had the greatest impact on productivity, indicating that producers have a tendency to catch-up with the front runners. In general, policy-makers are warned not to be indifferent with respect to the approach used for efficiency and productivity measurement as these may give different results.     

How efficient is the East German economy? An exploration with microdata

The purpose of this paper is to evaluate the efficiency of the East German economy at the firm level using an unbalanced panel over the transition period 1994 to 1998. We adopt a translog stochastic frontier model to estimate technical efficiency in eastern and western Germany. The results indicate that firms in eastern Germany are significantly less efficient than firms in western Germany. The paper also examines some of the possible correlates of regional variations in firm-level efficiency.
JEL classification: D24, C33, J31, O52.     

Cost efficiency of the Chinese banking sector: A comparison of stochastic frontier analysis and data envelopment analysis

This paper investigates the consistency of efficiency scores obtained from the stochastic frontier analysis and data envelopment analysis methods. We estimate cost efficiency and economies of scale based on an unbalanced panel data set of Chinese banks over the period 1994 to 2007. The results suggest moderate consistency between parametric and non-parametric frontier methods in efficiency scores rankings, identification of best and worst practise banks, the stability of efficiency scores over time and correlation between frontier efficiency and accounting based performance measures. Based on the findings, we conclude that the use of multiple frontier techniques for efficiency analysis is to be strongly recommended and that this methodological cross-checking analysis will result in more robust and convincing assessments of bank performance.     

Technical Efficiency in the Production of Economic Knowledge

This paper is an attempt to estimate technical efficiency in the production of economic knowledge. To that end, an educational production frontier was estimated via linear programming and an index of technical efficiency computed by forming the ratio, actual post TUCE/computed post TUCE. Professor teaching preferences and student learning preferences along with age and sex were used as regressors in an attempt to identify factors accounting for technical efficiency. Students were found to be very efficient in the production of knowledge.     

Investigating productivity change and hospital size: a nonparametric frontier approach

The study obtains measures of the productive efficiency of ‘larger’ and ‘smaller’ Northern Ireland hospitals during the 1986–92 pre-Trust period. The measures provide insights into how these hospitals were responding to the pressures for increased efficiency prior to Trust status. They also constitute a useful benchmark for evaluating productivity change under the post-1992 Trust status environment. A nonparametric frontier approach is used to measure productivity change and to decompose this into technical change (or shifts in the best practice frontier) and efficiency change (or change in how far a hospital is from the frontier). The latter change in efficiency is also decomposed into changes in scale efficiency, pure technical efficiency and input congestion. The findings indicate that smaller hospitals, starting from a less efficient base, achieved greater productivity gains than larger hospitals over 1986–92. For smaller hospitals, this was due to progressive shifts in the best practice frontier outweighing a substantial decline in efficiency. This decline was found to be due to a deterioration in scale efficiency over the period. The results overall support the current policy view that larger hospitals are more efficient than smaller hospitals in providing health care services.     

Performance of Dairy Plants in the Cooperative and Private Sectors in India

During the 1990s the cooperative dairy processing sector in India was exposed to greater competition from private sector plants. In this paper we measure cost efficiency (decomposed into technical and allocative efficiency) at the dairy plant level in the cooperative and private sectors in India. Two efficiency measurement methods are used: stochastic frontier analysis (SFA) and data envelopment analysis (DEA). The study utilizes an (incomplete) panel data sample of 23 plants, comprising 13 cooperative plants and 10 private plants, observed between 1992/93 and 1996/97. Our results indicate that cooperative plants are more cost efficient than private plants, although this difference is insignificant at the 5 per cent level. Furthermore, we observe that the cost efficiency of cooperative plants has not improved since market liberalization in 1991. These results suggest that the liberalization policy has not yet realized its expected benefits, and also cause us to question the general expectation that private operators will have efficiency advantages relative to cooperatives.     

Impact of the adoption of information and communication technologies on firm efficiency in the Tunisian manufacturing sector

This paper aims at measuring the impact of information and communication technology use on the efficiency of the Tunisian manufacturing sector at the firm level within a simple theoretical framework. We are using a firm-level panel data for the manufacturing sector in Tunisia to investigate whether adoption of ICT influences efficiency in factor use. The analysis is conducted through the use of a parametric method to measure technical efficiency. We estimate a stochastic production frontier and the relationship aims to explain technical efficiency differentials in a single stage as suggested by Battese and Coelli [Battesse, G.E, Coelli, T.J. (1995). A model for technical inefficiency in a stochastic frontier production function for panel data. Empirical Economics, 20, 325–332].The results have confirmed the presence of positive returns to ICT capital. We have found that the impact of ICT on efficiency is strong. Our results also suggest that it is important to carefully control for human capital related characteristics of employment when studying the effect of ICT. The evidence shows that achieving benefits from investment in ICT requires complementary investments and changes in human capital. This means that the combined use of ICT and human capital in a firm would enhance its efficiency beyond the direct effects of these factors taken alone.     

TECHNICAL EFFICIENCY,REGULATION AND HETEROGENEITY IN JAPANESE AIRPORTS

In this paper, the random stochastic frontier model is used to estimate the technical efficiency of Japanese airports, with regulation and heterogeneity included in the variables. The airports are ranked according to their productivity for the period 1987–2005 and homogeneous and heterogeneous variables in the cost function are disentangled. Policy implications are derived.     

Regulation and efficiency in transition: the case of Romanian banks

Using disaggregated panel data for the period 1996–2002, this paper estimates the cost efficiency of Romanian banks and relates it to regulation implemented by the National Bank of Romania. We estimate efficiency using a model that combines the frameworks of both stochastic frontier analysis and shadow cost functions. Our results indicate that, for all types of banks, the cost of technical inefficiency decreases in the years following tightening of regulation. A significant part of this decrease can be attributed to the policy change. Overall, the short-run increase in cost due to additional regulation exceeds the benefits from reduced technical inefficiency. However, our model does not account for other benefits, besides changes in X-inefficiency, such as stability of the banking system, which may be significant.      

中国不同行业全球价值链位置对创新效率的影响

关注中国各行业全球价值链位置对创新性效率的影响,基于新古典经济理论提出假设,采用非竞争性投入产出法计算中国19个代表性行业在全球价值链中的位置及变化趋势,测算其整体创新效率。进一步将创新效率分解为技术进步指数、规模效率指数、纯技术效率指数,通过观察分解变量值揭示行业差异。结果表明：研发阶段,处于全球价值链上游的行业,行业技术前沿水平上升,行业整体向前沿靠近的程度降低;生产阶段,处于全球价值链上游的行业,行业技术前沿水平下降,行业整体向前沿靠近的程度上升。     

Economic and productivity growth decomposition: An application to post-reform China

This paper examines and applies the theoretical foundation of the decomposition of economic and productivity growth to the thirty provinces in China's post-reform economy. The four attributes of economic growth are input growth, adjusted scale effect, technical progress, and efficiency growth. A stochastic frontier model with a translog production and incorporated with human capital is used to estimate the growth attributes in China. The empirical results show that input growth is the major contributor to economic growth and human capital is inadequate even though it has a positive and significant effect on growth. Technical progress is the main contributor to productivity growth and the scale effect has become important in recent years. The impact of technical inefficiency is statistical insignificant in the sample period. The relevant policy implication for a sustainable post-reform China economy is the need to promote human capital accumulation and improvement in technical efficiency.     

A panel data analysis of productive efficiency in freestanding health clinics

By using a panel data on a number of freestanding health clinics in New York State over 1984–1987, we have estimated the production function for ambulatory care after controlling for unmeasured clinic-specific managerial efficiency. We found significant differences in management efficiency, which peaks around 50500 visits per year. The optimal staffing ratio between doctors, extenders and nurses was found to be around 1∶1/3∶1, in order for a clinic to be on the efficiency frontier.     

CATCHING‐UP AND TECHNOLOGICAL PROGRESS OF THE ASEAN ECONOMIES

Total factor productivity growth of the five ASEAN founding members is estimated by decomposing total factor productivity growth into technical efficiency and technological progress. By using the stochastic frontier model with individual‐specific temporal pattern of technical efficiency for the period of 1981–2003, the present paper identifies the unique temporal pattern of productivity changes in each country, to analyze the relationship between country characteristics and the inherent efficiency and productivity changes. The empirical results indicate that over the study period, growth in Singapore and Malaysia was largely driven by both technological progress and input accumulation, whereas growth in Thailand was induced by an improvement in technical efficiency and through input accumulation.     

Evaluating the technical efficiency of large US law firms

We conduct a performance evaluation in terms of technical efficiency of large law firms based on a unique sample of 163 large law firms in the USA in 1994. To estimate technical efficiency for individual firms, we use the stochastic frontier production function with composed errors where output (measured in terms of revenue) is a function of various labour and human capital inputs. Based on the sample, the average level of technical efficiency in the production of legal service in large US law firms is estimated at 82.20%. More than 87% of the firms attained 75% or higher level of technical efficiency. The estimation results also indicate that the number of lawyers, the number of paralegals, and the number of associates per partner, have a positive and statistically significant effect on the production of legal service.     

HOW FAST DO TOKYO AND NEW YORK STOCK EXCHANGES RESPOND TO EACH OTHER? AN ANALYSIS WITH HIGH‐FREQUENCY DATA

This paper uses one‐min returns on the TOPIX and S&P500 to examine the efficiency of the Tokyo and New York Stock Exchanges. Our major finding is that Tokyo completes reactions to New York within six min, but New York reacts within fourteen min. Dividing the sample period into three subperiods, we found that the response time has shortened and the magnitude of reaction has become larger over the period in both markets. The magnitude of response in New York to a fall in Tokyo is roughly double that of a rise.     

Efficiency and productivity of the food and beverage listed firms in the pre-recession and recessionary periods in Greece

This study uses data envelopment analysis to examine the liquidity and sales efficiency of the Food and Beverage listed firms in Athens Exchange in the period 2006–2012. The liquidity efficiency of the firms is higher than the sales efficiency but the results indicate that there are not statistical significant differences in the rankings estimated by the two models in each period. The Malmquist Productivity Index reveals that over the period of the study, firms have experienced an annual average increase in productivity of 0.5% (a slight progress). On examining the components of this productivity change, it becomes evident that firms have experienced an annual average of 2% increase in technology combined with a decrease in technical efficiency of –1.5%. The results indicate that 52.4% of the firms experienced productivity gains in the examined period, and this was mainly the result of technological gain rather than efficiency improvement. More than 90% of the firms in the sample shift the efficiency frontier and only 33.3% of the firms are catching up, improving their productivity by reducing inefficiency. Moreover, the empirical study reveals that the overall technical inefficiencies of the firms are primarily caused by pure technical inefficiencies rather than scale inefficiencies.     

Technology,Exports And Firm Efficiency In Taiwanese Manufacturing

Using firm-level data from the 1986 Census of Manufactures of Taiwan, we examine the links between technical efficiency and firm investments in technology and exports. Stochastic production frontier techniques are used to estimate the technical efficiency of firms by investments in technology as well as by export orientation. Our results indicate that accounting for firm investments in technology is critical in explaining the strong export-productivity link in the extant literature. For the group of large, high technology firms, the differences in the mean efficiencies between exporters and non-exporters are not significantly different than zero in all nine industries under study. However, for the large number of small firms that make no formal investments in technology. exporters are significantly closer to the production frontier than their counterparts that sell in the domestic market.     

The productivity debate of East Asia revisited: a stochastic frontier approach

This paper applies a stochastic frontier production model to the data from Penn World Table's 49 countries over the period 1965 to 1990, to decompose total factor productivity growth into technical change and technical efficiency change. Empirical results show East Asian countries led the world in productivity growth, mainly because their technical efficiency gain was so much faster than that of other countries. East Asian countries also registered rapid technical change, which was comparable to that of the G6 countries after the late 1980s. The results provide evidence that negate the hypothesis that East Asian growth was mostly input-driven and unsustainable.