Measuring potential gains from reallocation of resources

In this work we consider the case when efficient operation of individual economic units does not necessarily imply efficiency for a group of these units. Merging theoretical findings of Li and Ng (Int Adv Econ Res, 1995, 1, 377.) and Färe and Zelenyuk (Eur J Oper Res, 2003, 146, 615), we develop new group-wise efficiency indexes that measure the extent to which the performance of a group of economic units can be enhanced, even if all these units are individually efficient. The existence of such potential improvement is attributed to non-optimal allocation of inputs across the individual economic units from the point of view of a group of these units.     

Testing the Empirical Relationship between Best Management Practice Adoption and Farm Profitability

Several "best management practices" (BMPs) aimed at reducing movement of nutrients, pesticides, and sediment into surface water resources have been developed and promoted by Extension and other agencies over the past several years. This study utilizes actual farm-level economic and BMP adoption data to rigorously analyze the relationship between BMP use and farm profitability. Results indicate that adoption of nutrient BMPs has a significant positive effect on net farm income (NFI) for wheat and corn, while herbicide BMP adoption, particularly use of BMPs related to the application of atrazine on corn, has a small (but statistically significant) negative impact on income. Adoption of soil conservation BMPs is not shown to have a statistically significant impact on farm income.     

Takeover activity in Australia: endogenous and exogenous influences

The present paper analyses the population of takeover bids for listed Australian companies using quarterly data over a 25-year period to re-examine the predictability of takeover activity and to determine if there is a flow on impact on macroeconomic variables. We examine whether takeover activity: (i) is endogenous; that is, determined by own activity; (ii) is jointly determined by macroeconomic and capital market variables; and (iii) has an exogenous spillover impact across the economy. We find that stock prices and takeover activity share a long-term common trend, the relative success of takeover bids is independent of sharemarket activity, and conclude that aggregate takeover activity is driven by fundamental economic factors rather than by speculative activity.     

Managing Supplier Involvement in New Product Development: A Multiple‐Case Study*

Existing studies of supplier involvement in new product development have mainly focused on project‐related short‐term processes and success factors. This study validates and extends an existing exploratory framework, which comprises both long‐term strategic processes and short‐term operational processes that are related to supplier involvement. The empirical validation is based on a multiple‐case study of supplier collaborations at a manufacturer in the copier and printer industry. The analysis of eight cases of supplier involvement reveals that the results of supplier–manufacturer collaborations and the associated issues and problems can best be explained by the patterns in the extent to which the manufacturer manages supplier involvement in the short term and the long term. The results of this study reveal that the initial framework is helpful in understanding why certain collaborations are not effectively managed yet conclude that the existing analytical distinction among four different management areas does not sufficiently reflect empirical reality. This leads to the reconceptualization and further detailing of the framework. Instead of four managerial areas, this study proposes to distinguish between the strategic management arena and the operational management arena. The strategic management arena contains processes that together provide long‐term, strategic direction and operational support for project teams adopting supplier involvement. These processes also contribute to building up a supplier base that can meet current and future technology and capability needs. The operational management arena contains processes that are aimed at planning, managing, and evaluating the actual collaborations in a specific development project. The results of this study suggest that success of involving suppliers in product development is reflected by the firm's ability to capture both short‐ and long‐term benefits. If companies spend most of their time on operational management in development projects, they will fail to use the leverage effect of planning and preparing such involvement through strategic management activities. Also, they will not be sufficiently able to capture possible long‐term technology and learning benefits that may spin off from individual projects. Long‐term collaboration benefits can only be captured if a company can build long‐term relationships with key suppliers, with which it builds learning routines and ensures that the capability sets of both parties are aligned and remain useful for future joint projects.     

Multi-equation modelling of desirable and undesirable outputs satisfying the materials balance

The key feature when modelling joint production of intended outputs and unintended residuals is that the latter stem from the use of material inputs. A multi-equation model building on the factorially determined multi-output model of classical production theory satisfies the materials balance that tells us that the mass contained in inputs cannot disappear, but must turn up in the desirable outputs or end up as residuals. In this model, potentially complex technical relationships are simplified to express each of the intended outputs and the residuals as functions of the same set of inputs. Serious problems with the single-equation models most often found in the literature are demonstrated. Abatement activity in the form of end of pipe is added, and an optimal planning solution is derived using the concept of an environmental damage function for the impact of discharge of residuals into the natural environment. It is shown that the traditional environmental policy instruments, like direct regulation restricting the amount of undesirable residuals discharged to the environment, a Pigou tax on pollutants, and cap and trade, all function well. Extending the multi-equation model to allow for inefficiency, three efficiency measures are introduced: desirable output efficiency, residuals efficiency, and abatement efficiency. It is conjectured that these measures can be estimated independently using the DEA model.     

Slack-based directional distance function in the presence of bad outputs: theory and application to Vietnamese banking

In this paper we extend the slack-based directional distance function introduced by Färe and Grosskopf (Eur J Oper Res 200(1):320–322, 2010) to measure efficiency in the presence of bad outputs and illustrate it through an application on data of Vietnamese commercial banks. We also compare results from the slack-based directional distance function relative to the directional distance function, the enhanced hyperbolic efficiency measure (Färe et al. in Rev Econ Stat 71(1):90–98, 1989) and the Farrell-type technical efficiency and confirm that it has greater discriminative power.     

Globally correlated nominal fluctuations

Fluctuations in nominal variables—aggregate price levels and nominal interest rates—are documented to be substantially more synchronized across countries at business cycle frequencies than fluctuations in real output. A transparent mechanism accounting for this striking feature of the nominal environment is described and quantitatively evaluated. It is based on the interaction between (small) cross-country spillovers of shocks, Taylor rules, and domestic no-arbitrage conditions. The mechanism is robust to various parameterizations and extensions aligning the model with other important aspects of domestic and international fluctuations. Furthermore, its key features are consistent with cross-country forecasts from Consensus survey.