The expectations hypothesis of the term structure of interest rates and monetary policy: some evidence from Asian countries

This article outlines a panel data approach to modelling the term structure of interest rates in the short and in the long run. We find robust evidence supporting the expectations hypothesis of the term structure (EHTS) for a small sample of Asian emerging markets. Furthermore, we detect some relevant differences in the transmission mechanism of monetary policy, and the existence of a McCallum (2005) rule (no exogeneity of monetary policy to the yield curve) in some countries. Finally, we document the influence of an international global factor (i.e. a time-varying global risk premium) on the yield curve, while local country-specific factors are not statistically significant.     

Stochastic Cost Frontier and Inefficiency Estimates of Public and Private Universities: Does Government Matter?

Stochastic frontier analysis is used to estimate operating cost inefficiencies of public and private non-profit universities in the U.S. while also accounting for the possible effects arising from differences in the degree of government ownership. Using panel data for four academic years, 2005?C2009, inefficiencies are estimated under two model specifications. Results indicate that public universities are more cost efficient when environmental factors influence cost frontiers but private universities are the cost efficient institutions when those factors are determinants of inefficiency. Increased government funding does matter and increases private sector inefficiency but offers some efficiency improvements among public universities. Following the global financial crisis, there is evidence indicating a considerable slowdown in the inefficiency growth among both public and private universities.     

Bank overall financial strength: Islamic versus conventional banks

A number of recent studies compare the performance of Islamic and conventional banks with the use of individual financial ratios or efficiency frontier techniques. The present study extends this strand of the literature, by comparing Islamic banks, conventional banks, and banks with an Islamic window with the use of a bank overall financial strength index. This index is developed with a multicriteria methodology that allows us to aggregate various criteria capturing bank capital strength, asset quality, earnings, liquidity, and management quality in controlling expenses. We find that banks differ significantly in terms of individual financial ratios; however, the difference of the overall financial strength between Islamic and conventional banks is not statistically significant. This finding is confirmed with both univariate comparisons and in multivariate regression estimations. When we look at the bank financial strength within regions, we find that conventional banks outperform both the Islamic banks and the banks with Islamic window in the case of Asia and the Gulf Cooperation Council; however, Islamic banks perform better in the MENA and Senegal region. Second stage regressions also reveal that the bank overall financial strength index is influenced by various country-specific attributes. These include control of corruption, government effectiveness, and operation in one of the seven countries that are expected to drive the next big wave in Islamic finance.     

Determinants of bank cost efficiency in transition economies: evidence for Latin America,Central and Eastern Europe and South-East Asia

In this study, we adopt Wang’s (2002) heteroscedastic stochastic frontier model, which allows us to investigate bank cost efficiency and to measure the marginal effects of some variables on both the level and the variability of inefficiency. In recent years, the financial crisis has significantly affected the banking systems of the transition countries. Hence, the efficiency is of major importance for the stability of the banks. Regarding the determinants of efficiency, we find evidence that banks that follow a more cautious strategy, characterized by lower risk appetite and average expectations on profitability, have higher cost efficiency. We also find that traditional deposit-taking and loan-making still remain the most efficient activity of the banks. Additionally, the results showed that a higher Gross Domestic Product growth rate implies an increase in the inefficiency level, indicating an unsustainable bank management behaviour, which in periods of economic growth adopts policies that can generate inefficiency in order to gain market share and to obtain higher bonuses. Country cost efficiency results show significant differences. The banking systems in transition countries in South Eastern Asia appear to have a higher cost efficiency level. Also, the effects of the financial crisis were less significant in this region.     

Performance of private higher education institutions in Vietnam: evidence using DEA-based bootstrap directional distance approach with quasi-fixed inputs

Vietnam’s higher education has witnessed substantial improvements since the implementation of the Doi Moi (renovation) policy. One of the significant developments is the promotion of establishment and enhancement of the role of private institutions in national education systems. However, the quest to improve the overall performance of the private higher education institutions remains a big challenge for many stakeholders. We assess the performance of Vietnamese private universities using a data envelopment analysis–based bootstrap directional distance approach with quasi-fixed inputs. The results show that there was a large variation in the efficiency levels of private universities within and between academic years and between metropolitan and other private universities. Our empirical findings provide more insights for educational leaders and policy makers on the performance of private higher education institutions and the implications of privatization of the national higher education system.     

AN ATTEMPT TO EXPLAIN DIFFERENCES IN ECONOMIC GROWTH: A STOCHASTIC FRONTIER APPROACH

Total factor productivity (TFP), factor accumulation, and growth are analysed for a panel of 40 countries in 2001–11. TFP growth and technical inefficiency are estimated using a stochastic frontier model. Environmental variables are found to have an important role in explaining differences in inefficiency across countries. Over 2001–11, the general improvement in technical efficiency of countries is almost outweighed by technological regress. Results indicate that differences in factor accumulation between OECD and emerging economies are more important than differences in TFP change to explain differences in economic growth. Results also indicate negative and significant random shocks for the OECD countries.     

Neoclassical versus Frontier Production Models? Testing for the Skewness of Regression Residuals*

The empirical literature on production and cost functions is divided into two strands. The neoclassical approach concentrates on model parameters, while the frontier approach decomposes the disturbance term to a symmetric noise term and a positively skewed inefficiency term. We propose a theoretical justification for the skewness of the inefficiency term, arguing that this skewness is the key testable hypothesis of the frontier approach. We propose to test the regression residuals for skewness in order to distinguish the two competing approaches. Our test builds directly upon the asymmetry of regression residuals and does not require any prior distributional assumptions.     

Cost and profit efficiencies in transition banking: the case of new EU members

This paper analyses cost and profit efficiencies in commercial banking in the eight Central and Eastern European countries that became new members to the European Union. Common stochastic cost and profit frontiers with country-specific variables are employed in order to take into account macro-economic and financial sector conditions that vary over time and across countries. The impact of foreign ownership on performance is also examined. The results indicate a wide range of cost and profit inefficiency scores across countries and across different size groups. All banking systems in the sample display significant levels of cost and profit inefficiency and there does not seem to be any continuous improvement in performance over time. There is also some evidence that foreign banks perform, on average, better than domestic banks.     

Productive efficiency and growth policies for the Caribbean

Productive (economic) efficiency and factors affecting it was evaluated in the Caribbean between 1983 to 1992. Results from non-parametric programming indicated that efficiency (i.e. pure technical, allocative and economic) measures were lower and more variable in Caribbean than in other Western Hemisphere countries (i.e. North America and Latin America). Tobit regression analysis indicated higher levels of private and foreign investments, productive infrastructure, credit availability, education level, and consumption of domestically produced goods had positive impacts on the efficiency measures. On the other hand, higher levels of public expenditure, income tax, and export taxes, and higher inflation rates had negative effects. These results support the current trend towards advocating more open economies (i.e. letting the free market work) and encouraging governments to confine their functions to facilitative/regulatory type roles and to undertaking tasks that are not generally undertaken by the private sector (e.g. developing infrastructure, providing education). Although, generally, the same factors were associated with efficiency in the Caribbean and Latin America, their relative impacts differed. Consequently, in order to improve efficiency in the Caribbean countries, relatively greater emphasis should be placed on encouraging foreign and private investment and developing infrastructure than would be the case in Latin American countries.     

MONEY DEMAND STABILITY AND INFLATION PREDICTION IN THE FOUR LARGEST EMU COUNTRIES

In this paper, we analyze the money demand functions of the four largest EMU countries and of the four-country (EMU-4) aggregate. We identify reasonable and stable money demand relationships for Germany, France and Spain as well as the EMU-4 aggregate. For the case of Italy, results are less clear. From the estimated money demand functions, we derive both EMU-4 and country-specific measures of money overhang. We find that the EMU-4 overhang measure strongly correlates with the country-specific measures, particularly since the start of EMU, and is useful to predict country-specific inflation. However, it generally does not encompass country-specific money overhang measures as predictors of inflation. Hence, aggregate money overhang is an important, but by far not an exhaustive, indicator for the disaggregate level.     

Women Managers and The Gender-Based Gap in Access to Education: Evidence from Firm-Level Data in Developing Countries

A number of studies explore the differences in men's and women's labor market participation rates and wages. Some of these differences have been linked to gender disparities in education access and attainment. The present paper contributes to this literature by analyzing the relationship between the proclivity of a firm having a top woman manager and access to education among women relative to men in the country. The study combines the literature on women's careers in management, which has mostly focused on developed countries, with the development literature that has emphasized the importance of access to education. Using firm-level data for seventy-three developing countries in 2007–10, the study finds strong evidence that countries with a higher proportion of top women managers also have higher enrollment rates for women relative to men in primary, secondary, and tertiary education.     

Measuring China's innovative capacity: a stochastic frontier exercise

We adopt a stochastic frontier analysis of innovative activity to disentangle countries’ patenting capacity from patenting efficiency. We analyse the determinants of innovative capacity of a set of 26 OECD countries plus China, over the period 1992–2007, to show if and how China's technological activity is growing faster than commonly held as compared to the most innovative countries of the world. Our results highlight that both internal and external elements jointly contribute to enhance countries’ innovative capacity and efficiency. In particular, while government-funded R&D is more important for innovative capacity, privately funded R&D as well as foreign direct investments (FDIs) affects technical efficiency (TE). Moreover, as for the whole set of countries, FDIs seem to exert a resource-seeking role (as they negatively affect TE), this does not happen for China, where FDIs exert a positive effect. Results are robust to the use of alternative measures of innovative inputs (such as higher education expenditure in R&D and R&D personnel, but also FDI flows rather than stocks). Finally, human capital measures are generally not very effective in enhancing patenting efficiency, apart from tertiary education.     

Determinants of technical efficiency of crop and livestock farms in Poland

Poland, one of the candidate countries for European Union membership, is currently experiencing acute structural problems within its agriculture sector. This article analyses technical efficiency and its determinants for a panel of individual farms in Poland specialized in crop and livestock production in 2000. Technical efficiency is estimated with stochastic frontier analysis (SFA) and confidence intervals are constructed. Determinants of inefficiency are also evaluated. The SFA results are compared with results using Data Envelopment Analysis (DEA). On average, livestock farms are more technically efficient than crop farms. For both specializations, the size–efficiency relationship is positive, that is large farms are more efficient. The SFA findings are generally supported by the DEA results. Soil quality and the degree of integration with downstream markets are highly important determinants of efficiency. The use of factor markets (land and labour) is important for crop farms, while livestock farms can rely on family labour and own land. Also, education is a constraint to efficiency particularly for crop farms.     

高校内部预算管理存在的问题与对策

随着高等教育事业的深入发展,高校的办学规模不断扩大,资金流量迅速增加,如何有效使用资金,实现资源的优化配置,成为高校财务管理的重要课题。高校内部预算管理是高校财务管理的重要组成部分,它的编制与执行关系到高校整体资金使用与合理配置,是提高高校办学效率的重要环节。     

The efficiency of social public expenditure in European countries: a two-stage analysis

Do European countries differ in the efficiency of their welfare policies? And which factors can account for such variability? To address these questions, we perform a two-stage efficiency analysis. First, based on a composite output indicator for social protection expenditure, we measure efficiency by means of the Free Disposable Hull and Data Envelopment Analysis techniques. Second, we perform an econometric analysis to identify the factors that can be associated to cross-country differences. We find that countries scoring higher efficiency have higher education and GDP levels, a smaller population size, a lower degree of selectivity of their welfare systems and a lower corruption level.     

Measuring the productive efficiency of a group of firms

While the conventional Farrell-Färe approach to efficiency measurement can identify the most inefficient firms, it fails to consider the efficiency of a group of firms thoroughly. This paper introduces efficiency measures that can be used to find the efficiency of a group of firms and pinpoint whether the group inefficiency is due to inefficiency inside or outside individual firms. Furthermore, a new way of finding the revenue maximum shadow price vector is introduced to compute the allocative efficiency of individual firms when price data are not available.     

Evolution of banking efficiency within an unstable macroeconomic environment: the case of Turkish commercial banks

This paper analyses the efficiency performance of the Turkish banking sector between 1988 and 1999, a period characterized by increasing macroeconomic instability. The technical and scale efficiencies of Turkish commercial banks are measured with the use of nonparametric Data Envelopment Analysis. The empirical results suggest that over the sample period both pure technical and scale efficiency measures show a great variation and the sector did not achieve sustained efficiency gains. It is also reported that the sector suffers mainly from scale inefficiency and scale inefficiency, in turn, is due to decreasing returns to scale. There are also reported differences in the efficiency performance of commercial banks with different ownership status. In addition, the relationships between profitability, asset quality, size and the two definitions of efficiency are considered. Efficient banks are more profitable, and pure technical efficiency and scale inefficiency are positively related to size. The trend in the performance levels over the period suggests that macroeconomic conditions had a profound influence on the efficiency measures.     

Real and perceived losses from unemployment: a cross-country study

This article compares the Unemployment Rate (UR) as a measure of inefficiency with several other potential measures across 18 Organization for Economic Co-operation and Development (OECD) countries. Results show that the UR is not a very good measure of relative inefficiency between countries, it overestimates the number of individuals who would get jobs if the market is clear, the Dead Weight Losses (DWLs) of UR are remarkably low even in high unemployment countries and the aggregate perceived monetary losses by the unemployed as a proportion of Gross Domestic Product (GDP) are also uniformly low, although inframarginal individuals in some countries may perceive their losses to be high.     

Inefficiency in Japanese water utility firms: a stochastic frontier approach

I examine inefficiencies in Japanese water utility companies. Efficiency in this context is defined as a firm’s capacity to maximize output given a fixed level of inputs. The findings suggest that the average operation rate, customer density and size variables are associated with lower levels of inefficiency (or higher levels of efficiency), while water purification (a conditioning variable capturing low initial water quality), subsidies and outsourcing are associated with higher levels of inefficiency. Since inefficiency exists, there is an opportunity to improve Japanese water utilities by working on emulating “best practice” firms whenever possible and by providing a regulatory framework that can set appropriate incentive schemes to do so.     

Is East Asia an optimum currency area?

This paper assesses the empirical desirability of the East Asian economies to an alternative exchange rate arrangement (a monetary union) that can potentially enhance the exchange rate stability and credibility in the region. Specifically, the symmetry in macroeconomic disturbances of the East Asian economies is examined as satisfying one of the preconditions for forming an Optimum Currency Area (OCA). We extend the existing literature by improving the methodology of assessing the symmetry shocks in evaluating the suitability of a common currency area in the East Asian economies employing the Bayesian State-Space Based approach. We consider a model of an economy in which the output is influenced by global, regional and country-specific shocks. The importance of a common regional shock would provide a case for a regional common currency. This model allows us to examine regional and country-specific cycles simultaneously with the world business cycle. The importance of the shocks decomposition is that studying a subset of countries can lead one to believe that observed co-movement is particular to that subset of countries when it in fact is common to a much larger group of countries. In addition, the understanding of the sources of international economic fluctuations is important for making policy decisions. The falling share of country specific factor and the rising role of region factor indicate that East Asia has become increasingly favorable for a monetary union. However, the share of country-specific factor that is still significant implies that it could be costly to renounce individual currencies to advance into a monetary union in East Asia.