The directional profit efficiency measure: on why profit inefficiency is either technical or allocative

The directional distance function encompasses Shephard’s input and output distance functions and also allows nonradial projections of the assessed firm onto the frontier of the technology in a preassigned direction. However, the criteria underlying the choice of its associated directional vector are numerous. When market prices are observed and firms have a profit maximizing behavior, it seems natural to choose as the directional vector that projecting inefficient firms towards profit maximizing benchmarks. Based on that choice of directional vector, we introduce the directional profit efficiency measure and show that, in this general setting, profit inefficiency can be categorized as either technical, for firms situated within the interior of the technology, or allocative, for firms lying on the frontier. We implement and illustrate the analytical model by way of Data Envelopment Analysis techniques, and introduce the necessary optimization programs for profit inefficiency measurement.     

Modeling CRS bounded additive DEA models and characterizing their Pareto-efficient points

Dealing with weighted additive models in Data Envelopment Analysis guarantees that any projection of an inefficient unit belongs to the strong efficient frontier, among other interesting properties. Recently, constant returns to scale (CRS) range-bounded models have been introduced for defining a new additive-type efficiency measure (see Cooper et al. in J Prod Anal 35(2):85–94, 2011). This paper continues such earlier work further, considering a more general setting. In particular, we show that under free disposability of inputs and outputs, CRS bounded additive models require a double set of slacks. The second set of slacks allows us to properly characterize all the Pareto-efficient points associated to the bounded technology. We further introduce the CRS partially-bounded additive models.     

Productivity change of Portuguese municipalities after local reforms

This article examines the impact of the reforms introduced in the structure of the Portuguese local administration after the bailout agreement in 2011 on the efficiency and productivity of municipalities. In order to determine a measure of productivity change, we apply the global Malmquist productivity index to assess the performance of the 278 Portuguese mainland municipalities for the recent 6-year period 2009–2014. The overall results reveal that there was a decrease in the global productivity until 2013 followed by a notable increase in 2014 basically due to technological changes, thus it seems that the reforms have had a positive effect on the productivity of municipalities.     

Catalan firms and the distribution of products in Europe

The food industry sector has seen major changes in the ways it needs to compete. Spain became linked to the European Community in the early 1970s by an adherence treaty which regulated food exports to the member countries. Subsequently, when Spain became a full European Community member in January 1986, both exports and imports to and from countries (Mediterranean or otherwise) became regulated. There had not previously been a tradition of trade links with most of these countries. After 10 years of full coexistence with the other European members, it is possible to test the effect of free circulation of goods, the major presence of community multinationals in the markets, the restructuring of the food industry sector, and the penetration of Spanish products in European markets. At present, the objectives of economic convergence contemplated in the Maastricht Treaty call for the control of macroeconomic variables (particularly inflation) which affect the food industry (by virtue of its special characteristics) far more than the remaining sectors because of its peculiarities. This paper is a summary and extension of a broader study conducted by Lourdes Viladomiu (Universitat Autònoma de Barcelona), María de los Angeles Gil Estallo (Universitat Pompeu Fabra), Jordi Melé (Universitat de Barcelona), and Manuel Cantos (Universitat Pompeu Fabra) financed by the Fundació Empresa i Ciència of the Universitat Autònoma de Barcelona.     

Closest targets and minimum distance to the Pareto-efficient frontier in DEA

In this paper, we propose a general approach to find the closest targets for a given unit according to a previously specified criterion of similarity. The idea behind this approach is that closer targets determine less demanding levels of operation for the inputs and outputs of the inefficient units to perform efficiently. Similarity can be interpreted as closeness between the inputs and outputs of the assessed unit and the proposed targets, and this closeness can be measured by using either different distance functions or different efficiency measures. Depending on how closeness is measured, we develop several mathematical programming problems that can be easily solved and guarantee to reach the closest projection point on the Pareto-efficient frontier. Thus, our approach leads to the closest targets by means of a single-stage procedure, which is easier to handle than those based on algorithms aimed at identifying all the facets of the efficient frontier.

Why is export-oriented entrepreneurship more prevalent in some countries than others? Contextual antecedents and economic consequences

Drawing on institutional economics, this article investigates how different contexts condition the prevalence of export-oriented entrepreneurship, which affects economic growth. We place emphasis on the differences between developed and developing countries through interaction effects that allow us to test for differential validity. Using simultaneous equation panel data models for a sample of 43 countries (2004–2012), we find that access to credit and access to communications are the most significant factors in explaining the export-oriented entrepreneurship required for economic growth. Policy implications for both developed and developing countries are suggested to enhance economic performance under specific context characteristics through export-oriented entrepreneurship.     

Twenty-five years of research on institutions,entrepreneurship, and economic growth: what has been learned?

Small Business Economics - This paper analyzes an emergent stream of research shedding light on the institutional factors shaping entrepreneurial activity and its effect on economic growth. This...