Efficiency Of Firms Research Articles

Efficiency of the Integrated Production Systems: Evidence from the Winegrowing Firms in Italy

In Italy, the environmental sustainability of the agricultural sector is regulated by the National Integrated Production Quality System. It is the foundation of the regional Integrated Production Regulations (IPRs), which identify voluntary agronomic strategies on the use of pesticides, fertilisers, and irrigation water, as well as on soil and plant management. The aim is a reduction in the environmental impacts of the agricultural processes and an increase in the production quality. However, the direct relationship between environmental and economic sustainability of the regional IPRs is not obvious and its absence could weaken the economic efficiency of firms. The study, through the stochastic frontier (SF) method, investigates the possible inefficiencies of the regional winegrowing firms that voluntarily adhere to the Apulian IPRs. The results highlight that some measures in the IPRs aimed at preserving the local agroecosystems (soil management and use of resistant varieties) are efficient, therefore allowing for an increase in the production value and quality. On the contrary, crucial measures concerning the management of irrigation water and pesticides decrease efficiency. Thus, more thoughtful measures are requested by policy makers to improve the economic impacts of the regional IPRs on firms and to make possible a certain convergence between environmental and economic sustainability.

Managerial focus and investment efficiency:‐ Evidence from spin‐offs

AbstractWe explore investment efficiency before and after a spin‐off to assess whether post‐spinoff managerial structure helps maintain investment efficiency. Our findings reveal that the investment efficiency of parent firms remains significant when there is a clear separation of management between the parent and spun‐off firms. However, a considerable decline in efficiency is observed after the spin‐off in cases where there is overlapping management. This decrease in efficiency is particularly pronounced when the parent and spun‐off firms operate in different industries and are geographically distant from each other. Furthermore, we show that inefficient alignment of incentives for the overlapped management exacerbates this decline in investment efficiency.

Family firms and the collaborative advantage: unveiling innovation efficiency across partnership types

PurposeBased on the resource orchestration perspective, this paper aims to examine whether family firms are more efficient in their collaboration for innovation process than non-family firms, considering different types of collaboration for innovation depending on the kind of partner.Design/methodology/approachThis study empirically develops and tests the hypotheses based on a panel data sample of 14,937 firm-year observations from 1,867 Spanish manufacturing firms over the period 2007–2014, performing a Propensity Score Matching (Propensity score matching)-based analysis.FindingsResults reveal that family firms outperform non-family firms, despite less collaboration and innovation inputs, thereby extending the ongoing debate surrounding the innovation efficiency of family firms. Family firms obtained better results through vertical collaborations for innovation, both in terms of product and process innovations. For horizontal collaborations, family firms only outperform their non-family counterparts in process innovation. When collaborating with universities and other research centers, there are no significant differences in the innovation outcomes between the two groups.Originality/valueRecent literature points out that more research is needed to know when, how and under what circumstances family firms show superior innovative efficiency. This work empirically proves that family firms outperform non-family firms in collaboration for innovation. However, not all collaboration partners help family firms to reach this superior innovative efficiency. Family firms obtained better results just through vertical and horizontal collaborations.

Technology factors and ERP system efficiency in the Jordanian industrial firms: does company size matter?

The study was structured to investigate the impact of technological factors on the effectiveness of enterprise resource planning (ERP) in Jordanian industrial firms, using a descriptive-analytical approach. This study also examines company size as a moderator variable, which has been measured using the logarithm of total assets extracted from each firm’s annual report. The study’s target population consisted of all Jordanian industrial firms listed on the Amman Stock Exchange, totaling 55 firms. Managers participated as respondents, with 220 questionnaires distributed electronically, averaging four questionnaires per company. After data collection, 92 valid questionnaires were used for statistical analysis. The findings indicate a significant and positive relationship between technological factors (such as ease of use, perceived usefulness, and digital proficiency) and ERP system effectiveness in Jordanian industrial firms. However, the study revealed that trust, as one of the technological factors, did not significantly impact ERP system efficiency. Additionally, it was found that the moderating role of company size moderates positively the relationship between two technological factors (i.e., perceived usefulness and digital proficiency), and ERP system efficiency. The research suggests that industrial firms in Jordan should take into account technological factors, including factors like ease of use, perceived usefulness, and digital proficiency, to remain current with advancements that can improve the efficiency of ERP systems. This is important due to the positive influence it can have on the operational effectiveness of Jordanian industrial companies, aiding them in their planning and decision-making processes.

International trade and performance of firms- Trade dynamics of import export and productivity

Worldwide exchange has encountered uncommon development in late many years, driven by globalization, mechanical headways, and exchange advancement arrangements. This pattern has altogether impacted the systems and activities of firms around the world. Firms participating in worldwide exchange are presented to different open doors and difficulties that can significantly affect their presentation and seriousness. Understanding the elements of global exchange and its suggestions for firm efficiency is, subsequently, vital for policymakers, chiefs, and specialists. This study examines the unpredictable connection between global exchange elements, especially import-send out exercises, and firm execution, with an emphasis on efficiency. Worldwide exchange has turned into a fundamental part of the worldwide economy, affecting the seriousness and manageability of firms across different enterprises. Utilizing a blend of hypothetical systems and exact examination, this paper plans to give experiences into what firms' commitment to import and commodity exercises means for their efficiency levels. By evaluating existing writing and examining important information, the review adds to a more profound comprehension of the components through which worldwide exchange influences firm execution. The discoveries offer significant ramifications for policymakers, chiefs, and partners looking to upgrade firms' seriousness in the worldwide commercial center. A production network is just pretty much as solid as its most vulnerable connection. Firms are continually overseeing vulnerabilities, remembering startling postponements for the arrangement of a basic info that can dial back or stop the creation cycle, conceivably making the maker miss a conveyance cutoff time. As most exporters are likewise merchants of transitional products, store network inconsistency connected with import handling times at the line could influence downstream commodity elements. Taking advantage of a rich informational index based on firm-level data for 48 non-industrial nations more than 2006-14, this paper depends on the Poisson pseudo-greatest probability assessor to research what unusualness in line leeway times for imports means for assembling firms' entrance, exit, and endurance in send out business sectors. The examination tracks down that vulnerability in the opportunity to clear imported inputs influences neither the section nor the leave rate, however converts into lower endurance rates for new exporters, decreasing the quantity of firms that keep on serving the unfamiliar market past their most memorable year of passage. This impact develops bigger over the long haul, attributable to rising reputational expenses to enter bringing in exporters, and is primarily determined by South-North exchange, potentially mirroring the time-responsiveness of purchasers in created nations. The outcomes additionally uncover heterogeneous impacts across trade businesses, as well as the interceding job of sunk expenses of passage in unfamiliar business sectors, which constrict the adverse consequence of vulnerability on endurance rates, as firms delay leaving the commodity market. In particular, the proportion of vulnerability shows an unmistakable impact on send out execution, as neither the mean nor the middle opportunity to import influences endurance. Submit Research Paper Submit Research Paper Publication Procedure Publication Ethics Call for Papers Publication Topics Guidelines Disclamiar Copyright Infragmentation FAQ Terms and Conditions Digital Object Identifier Editorial Board Health Care+ Download Manuscript Template Copyright Form Sample Certificates

Information Systems and Operational Efficiency of Maritime Firms in Port Harcourt

The study examined the relationship between information systems and operational efficiency of maritime firms’ in Port Harcourt, Rivers State. Three research questions and three research hypotheses were formulated to address the specific objectives of this study. The RBV theory was adopted in this study and also quantitative research design using a correlational method of investigation. The population consists of 16 maritime firms in Port Harcourt. Census sampling was applied with focus on managers. Four managers per firm were sampled; a total of 64 managers were sampled. The reliability of the instrument was determined using Cronbach alpha test and it stood at 0.88 higher than the benchmark of 0.7. The data collected for this study were analyzed through descriptive and inferential statistics. The Spearman Rank-Order Correlation Technique was employed to test the various hypotheses formulated. The result of the analysis revealed that the information system is significantly and positively related to the operational efficiency of maritime firms’ in Port Harcourt, Rivers State. The empirical results of this study confirmed this as a positive and significant relationship was found between processing transaction systems and operational efficiency of maritime firms, and between electronic data interchange and operational efficiency of maritime firms. Based on these findings, it was concluded that the information system with its dimension of processing transaction system and electronic data interchange will improve operational efficiency of maritime firms in Port Harcourt. This study recommends that maritime firms should leverage on information systems as this would ensure reduction in cost and improve operational efficiency; they should use processing transaction system in order to facilitate the recording, tracking, and management of business transactions within the organization and the port, and they should adopt electronic data interchange for processing of documents and timely delivery of same.

The bright side of bank lobbying: Evidence from the corporate loan market

Bank lobbying has a bitter taste in most forums, ringing the bell of preferential treatment of big banks from governments and regulators. Using corporate loan facilities and hand-matched information on bank lobbying from 1999 to 2017, we show that lobbying banks increase their borrowers' overall performance. This positive effect is stronger for opaque and credit-constrained borrowers, when the lobbying lender possesses valuable information on the borrower, and for borrowers with strong corporate governance. Our findings are consistent with the theory positing that lobbying can provide access to valuable lender-borrower information, resulting in improved efficiency in large firms' corporate financing.

Effect of Financial Structure on Operational Efficiency of Non-Financial Firms Listed at Nairobi Securities Exchange

Effect of Financial Structure on Operational Efficiency of Non-Financial Firms Listed at Nairobi Securities Exchange

Efficiency in Operations of NASDAQ Listed Technology Companies from 2011 to 2023

The performance of technology companies listed on NASDAQ significantly impacts larger economic trends. Investors need specific information to navigate market volatility and make informed decisions in an increasingly complex marketplace. Furthermore, amidst the ongoing digital revolution, legislators and regulatory agencies must comprehend the operational dynamics of technology companies to develop frameworks that support innovation while maintaining market stability. Our study assesses the impact on the overall operational efficiency of NASDAQ-listed firms from 2011 to 2023, resulting from the interdependence of critical variables such as selling, general, and administrative expenses (SGA), cost of goods and services sold (COGS), and investments in research and development (R&D). Johansen’s cointegration methodology and pairwise Granger causality tests were employed to unveil long-term relationships, equilibrium adjustments, and causal relationships among the considered variables. The results provide critical insights into the strategic management of operational variables by the listed companies. The economic significance of the results obtained underscores the paramount importance of efficiently managing the cost of goods and services sold to achieve superior operating performance among these leading technology firms.

How do environmental, social and governance initiatives and controversies explain the firm efficiency of Chinese energy companies?

PurposeThis study investigates how the initiatives and controversies related to environmental, social and governance (ESG) explain firm efficiency.Design/methodology/approachFirstly, this study applies data envelopment analysis with the epsilon-based measure to estimate the firm efficiency of 80 companies in the Chinese energy sector in 2022. This approach accounts for the diversity and relative importance of inputs and outputs from a multidimensional perspective. Secondly, this study regresses the variables of ESG initiatives and controversies on the estimated firm efficiency scores through a generalised additive model, which can capture nonlinear patterns.FindingsThis study finds that a) the samples have i) about 49% room for improvement in efficiently optimising their resources and business outcomes and ii) the highest scores in governance initiatives, followed by social initiative. b) 69% of them have controversy scores that are greater than the average value. c) A cluster analysis indicates that companies with higher social initiatives have higher firm efficiency than their counterparts. d) ESG initiatives and controversies are nonlinearly related to firm efficiency.Research limitations/implicationsThe findings have practical implications for policy makers and managers who prioritise ESG, particularly regarding (i) the need to examine firm performance from a multidimensional perspective, that is, to measure multiple inputs and outputs simultaneously, (ii) the nonlinearity of the nexus between ESG and efficiency in graphical forms, and (iii) the need to balance ESG initiatives and address ESG controversies.Originality/valueThis study integrates statistical approaches in examining and ensuring sustainable growth and efficiency within the Chinese energy sector and beyond.

Human Capital Efficiency and Firm Performance of Quality-Certified Firms from EFQM Excellence Model: A Dynamic Panel Data Study

Abstract Purpose The study’s main purpose is to investigate the impacts of human capital efficiency (HCE) on the firm performance of non-certified and quality-certified firms from the European Foundation for Quality Management (EFQM) Excellence Model. The study also examines the relationship between firm performance and quality-certificates from the European Foundation. Design/methodology/approach By using a sample of 282 non-certified and 22 quality-certified firms from 2017 to 2021, the current study employed a two-step system generalized method of moments (GMM) estimation to analyse the empirical data. The dummy variable is used to examine the relationship between quality-certificates and firm performance. The dummy interaction term is employed to quantify the impacts of HCE on the firm’s performance for quality-certified firms. Findings The results revealed that quality-certificates and firm performance have a positive relationship. Quality-certified firms perform better and earn more profits than non-certified firms. HCE has a positive impact on firm performance for both types of firms. Moreover, the quality-certified firms utilize HCE in an efficient way to earn more profits compared to the non-certified firms. Originality This is the first study to use a comprehensive analysis to emphasize the HCE for non-certified and quality-certified firms separately. The effects of quality-certificates on firm performance in the context of HCE are also being highlighted for the first time in this research. Practical implications The current study’s findings are fruitful for academics, managers, researchers, policymakers, and other firm management. The findings will encourage the management of the firms to implement the total quality management (TQM) approach within their firms.

Decoding financial performance of US-listed entities: A sectoral exploration of input efficiency amid stochastic volatility

This study explores the complex relationship between firm efficiency and stochastic volatility, focusing on how firms utilise inputs to generate sales and the impact of financial shocks on efficiency levels. Utilising a dataset of 476 U.S. firms across 23 sectors from 2010 to 2022, it integrates stochastic volatility into efficiency analysis, treating volatility as an evolving, unobserved process diverging from traditional methods. The research classifies sectors into various efficiency performance categories based on their response to economic fluctuations. Findings show divergent patterns across sectors, with some exhibiting consistent efficiency and others facing erratic performance due to market and technological changes. This analysis provides valuable insights into sectoral adaptability and resilience in fluctuating economic conditions, offering strategic implications for managers and policymakers.

From ethics to efficiency: Understanding the interconnected dynamics of ESG performance, financial efficiency, and cash holdings in China

This study examines the impact of Environmental, Social, and Governance (ESG) principles on firm efficiency and cash holdings in China's non-financial sector from 2010 to 2022. Through fixed effect and system GMM regression analyses, it finds that higher ESG scores enhance operational efficiency, leading to decreased cash reserves. The research highlights that sustainable practices contribute to ethical standing and financial resilience, encouraging firms to integrate ESG strategies with financial objectives. The corporate firms are encouraged to view sustainable practices not merely as compliance measures but as strategic imperatives that contribute to both ethical standing and financial resilience. By exploring the linkage between sustainable practices and financial strategies, this study enriches the dialogue on sustainable finance and responsible corporate governance, demonstrating the financial benefits of ESG adherence.

ESTIMATION OF EFFICIENCY AND THE IMPACT OF COVID-19 ON THE EFFECT OF ACCESS TO FINANCE ON EFFICIENCY OF SMALL AND MEDIUM ENTERPRISES (SMEs) IN THE WESTERN AREA OF SIERRA LEONE

<p>To estimate efficiency and the impact of COVID-19 on the effect of access to finance on the efficiency of small and medium enterprises (SMEs) in the Western Area of Sierra Leone, the study adopted the stochastic frontier estimation method of determining the efficiency of firms. A model of maximum performance (capacity) was estimated using 450 SMEs randomly selected from the population of registered SMEs in the Western Area of Sierra Leone from 2018 to 2020. The model of net business earnings was estimated using the Maximum Likelihood procedure and the firm efficiencies were consequently estimated. The mean inefficiencies are estimated by various categories, including SMEs' access to bank credit to determine firm characteristics that are associated with higher mean efficiencies. The empirical results reveal that the potential of firms is determined positively by capital productivity and labour productivity and negatively by the experience of firms, the latter results suggesting that more experience does not push their production outwards but inwards. However, other factors found significant in efficiency differences among firms include gender of the head of the SME, educational level, professional training of the firm heads, sector of operation and the area of operation of the SMEs. Moreover, firm mean efficiencies are not found to vary across the three periods 2018, 2019 and 2020, suggesting the COVID-19 pandemic did not affect firm efficiencies.</p><p><br /><strong>JEL:</strong> F13, F15</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0787/a.php" alt="Hit counter" /></p>

Does corporate governance affect investment efficiency of Indian firms? Panel evidence from new governance indices

AbstractThis study examines the effects of corporate governance (CG) on investment inefficiency for 506 Indian listed firms. Using new stipulations of CG and globally recognized governance practices, an overall corporate governance index (CGI) and five sub‐indices such as board index (BINDEX), audit index (AINDEX), ownership index (OINDEX), nomination and remuneration index (NRINDEX), and disclosure index (DINDEX) were constructed. Employing newly developed governance indices along with firm‐specific control variables, several pooled regression models were estimated. Robustness checks were conducted using two‐step system GMM and an alternate measure of managerial investment efficiency. The pooled estimated coefficient of CGI and sub‐indices (except OINDEX) on investment inefficiency, overinvestment and underinvest is found to be negative and significant suggesting that effective/robust governance at firm level reduces investment inefficiencies (improves investment efficiency) through effective supervision and monitoring thereby reducing the opportunistic behavior of managers.

Capital Structure and Firm Efficiency of Deposit Taking Saccos in Kenya

Capital Structure and Firm Efficiency of Deposit Taking Saccos in Kenya

“Wrong” skewness and endogenous regressors in stochastic frontier models: an instrument-free copula approach with an application to estimate firm efficiency in Vietnam

Stochastic frontier models commonly assume positively skewed inefficiency. However, if the data speak against this assumption, sample-failure problems are often cited, but less attention is paid to economic reasons. We consider this phenomenon as a signal of distinctive population characteristics stemming from the inefficiency component, emphasizing its potential impact on evaluating market conditions. Specifically, we argue more generally that “wrong” skewness could indicate a lack of competition in the market. Moreover, endogeneity of model regressors presents another challenge, hindering the identification of causal relationships. To tackle these issues, this paper proposes an instrument-free estimation method based on Gaussian copulas to model the dependence between endogenous regressors and composite errors, while accommodating positively or negatively skewed inefficiency through simultaneous identification. Monte Carlo simulation experiments demonstrate the suitability of our estimator, comparing it with alternative methods. The contributions of this study are twofold. On the one hand, we contribute to the literature on stochastic frontier models by providing a comprehensive method for dealing with “wrong” skewness and endogenous regressors simultaneously. On the other hand, our contribution to an economic understanding of “wrong” skewness expands the comprehension of market behaviors and competition levels. Empirical findings on Vietnamese firm efficiency indicate that endogeneity hinders the detection of “wrong” skewness and suggests a lack of competitive market conditions. The latter underscores the importance of policy interventions to incentivize firms in non-competitive markets.

Efficiency and Performance of Top Indian Pharmaceutical Firms: A Comparative Analysis

The Indian pharmaceutical industry has made significant strides in the past five decades and is an important contributor to the provision of quality healthcare services in any economy. This paper studies the efficiency of selected top ten pharmaceutical companies by applying Data Envelopment Analysis (DEA) under constant return to scale (CRS) model and variable returns t ale (VRS) model. The inputs used in the study are assets, salaries, and wages. The outputs used are Return on Asset, and Net Profits. The study found Divis Laboratories and Sun Pharma to be most efficient under CRS and Sun Pharma was found to be most efficient under VRS models during 2019 – 2023. Seven pharmaceutical companies were working under Increasing returns to scale, two were working under constant returns to scale and one was performing under decreasing returns to scale. Return on assets, Net Profit margin and Return on Capital Employed Ratio were used to study financial performance of the pharmaceutical companies. Abbot India had the highest return on assets (17.948%). Divis Labs had the highest Net Profit Margin (27.76%). Mankind Pharma led in Return on Capital Employed (27.524%), This result further adds to the result provided by DEA. Companies found to be efficient by DEA were found to have high performance standards. Also, through the regression analysis the impact of variables Return on Capital Employed (ROCE) and Net profits margin (NPM) on Return on Asset (ROA) was studied. Returns on Assets (ROA) are 93.6% dependent on Net profits margin and Return on Capital Employed. There is significant (p-value = 0.000) relationship between Return on Asset (ROA), Net profits margin (NPM) and Return on Capital Employed (ROCE).

Financial institution agglomeration and corporate labor allocation efficiency—Based on the context of government debt expansion

This study investigates how financial institution agglomeration affects labor allocation efficiency in non-financial firms listed on China's A-share markets, within a context of expanded government debt and relaxed local debt financing controls. Results show that such agglomeration significantly improves labor efficiency, mainly by easing financing constraints. The positive impact is stronger in non-state-owned and manufacturing firms.

Determinants of Capital Structure: Evidence from Securities Companies

The objective of the paper is to explore the factors that tend to affect the debt-equity choice of securities companies in Pakistan. Data on the variables used in the study was extracted from income statements and balance sheets of various securities companies registered with the SECP over a period of 14 years from 2008 to 2021. Panel data analysis is based on the use of econometric techniques (fixed effects and random effects models) for estimation of results. Results of the study demonstrate that securities companies prefer to finance their assets with equity which denotes 72.15% of their total assets. In contrast, the total liabilities designate 27.85% of their assets. Profitability appears to be positively related to total and long-term debt ratios. The firm size is positive while tangibility is inversely associated with total and short-term debt ratios. Liquidity is negatively linked to all proxies of capital structure while the firm efficiency appears to have a positive connection with the short-term debt ratio. Results of the study are consistent with the predictions of trade-off and pecking order models. The empirical outcomes of the research offer some useful policy implications for regulatory authorities, managers and shareholders of the Securities Companies in Pakistan.