Network Slacks-based Measure Model Research Articles

The contrasting effects of interregional networks and local agglomeration on R&D productivity in Chinese provinces: Insights from an empirical spatial Durbin model

This paper examines the contrasting effects of local agglomeration in innovation activities and the interregional networks derived from innovation collaboration on R&D productivity. Based on a two-stage R&D process, this study enriches the existing research and highlights the significance of interregional networks and local agglomeration in understanding spillover effects and productivity improvement. This study employs the network slacks-based measure model to quantify the R&D productivity of two successive stages of research and technology transfer using panel data from 2009 to 2017 for 30 Chinese provinces. It employs the spatial Durbin model to explore and compare the effects of interregional networks and local agglomeration on R&D productivity at each stage. The findings show that interregional networks play an important role in improving research productivity, while local agglomeration is more important in technology transfer research. The significant spatial spillover effect of technology transfer productivity in adjacent provinces indicates a large likelihood of convergences in R&D productivity. The results confirm that interregional networks and local agglomeration operate at distinct parts of the R&D process.

Nonlinearities between bank stability and income diversification: A dynamic network data envelopment analysis approach

This study contributes to the ongoing debate about the cost-benefit tradeoff of income diversification in banking. Its main objective is to shed light on the non-linear effects of income diversification on the financial stability of a set of European commercial banks during the post-financial crisis period (2010–2019). From an efficiency perspective, we use a three-stage dynamic network slacks-based measure model to assess the financial stability of banks, including non-performing loans as a measure of risk that is carried over between two periods. Then, by performing a panel smooth transition regression model, we investigate the regime-switching behavior of the relationship between income diversification and bank stability by showing how these variables heterogeneously interact with each other. Our findings show that high levels of income diversification negatively and significantly impact bank financial stability regardless of the diversification index used. Important policy implications arise from our findings pertaining to the optimality of income diversification and financial stability of European banks.

Value Creation Performance Evaluation for Taiwanese Financial Holding Companies during the Global Financial Crisis Based on a Multi-Stage NDEA Model under Uncertainty

In this paper, we use the multi-stage network slacks-based measure model under uncertainty to evaluate the performance of Taiwanese financial holding companies (FHCs) from 2007 to 2012. We conceptualize the value creation process to be a two-stage framework, as the profitability and the marketability stages with a serial-linkage relationship, in order to solicit more information from the value creation process of FHCs. Under this framework, the profitability stage can be further divided into banking, insurance, and securities profitability sub-stages. In addition, we further extend the proposed model mentioned above to not only incorporate the NPLs as the undesirable output in the banking profitability stage but also use the fuzzy set approach to process its uncertainty. Results indicate that the discriminatory ability of our model is higher when we simplify the variables in the model specification. We also find that all Taiwanese FHCs in that particular period were “inefficient performers”, which is mainly attributed to the weak profitability performance, especially in banking service. We postulate that the global financial crisis, the US subprime crisis in particular, had a negative effect on the value creation performance of Taiwanese FHCs; however, they gradually recovered and improved their performance after the crisis.

The threshold effects of income diversification on bank stability: an efficiency perspective based on a dynamic network slacks-based measure model

The threshold effects of income diversification on bank stability: an efficiency perspective based on a dynamic network slacks-based measure model

Evaluation of the Efficiency of Maritime Transport Using a Network Slacks-Based Measure (SBM) Approach: A Case Study on the Korean Coastal Ferry Market

Safety is a key performance indicator for the sustainable management of a coastal ferry service business. An efficiency strategy that balances safety and transport performance should be considered. The purpose of this study is to evaluate the relative transport efficiency of coastal ferry operators through undesirable safety-related output. Coastal ferry operators create added value through logistics activities such as cargo and passenger transport. Accordingly, this study designed a three-stage network-slacks-based measure (SBM) model that delineated production through ferry transport services such as service generation, service execution, and transport value creation. Detention records and marine accidents caused by human errors or technical faults were considered undesirable safety-related outputs. Moreover, the relative transport efficiency of 23 Korean firms that have continuously managed a coastal ferry transport business from 2015 to 2018 was analyzed. The results showed that the differentiation of transport efficiency of firms improved when applying the three-stage network SBM model compared to applying the SBM model that did not consider the internal production stage. This fact suggests that it is more desirable to apply the three-stage network SBM model proposed in this study when a more stringent comparison of transport performance is needed in terms of service quality.

Efficiency evaluation for regional industrial water use and wastewater treatment systems in China: A dynamic interactive network slacks-based measure model

This paper develops a dynamic interactive network slacks-based measure (SBM) model to assess the performance of regional industrial water systems (IWSs) in China. Such a system can be separated into a water use subsystem (WUS) and a wastewater treatment subsystem (WTS). Within this, wastewater and recycled water are interactive intermediate variables, and the capacity of facilities for treatment of wastewater (CTW) can be considered as a carry-over variable, reflecting dynamic components. Based on the proposed approach, we specify an evaluation technique for the subsystem, period, and subsystem period efficiencies. We apply the proposed approach to analyze the efficiencies of 30 regional IWSs in China during 2008–2014, and the results show the carry-over CTW has notable impacts on the overall efficiency of the IWS, especially on WTS efficiency. Only four regions are deemed overall efficient, namely, Beijing, Tianjin, Fujian, and Hainan. The inefficiency of the whole system arises from weaknesses in both the WUS and the WTS. It was found that the eastern area has the highest mean overall efficiency and mean subsystem efficiencies among the three major geographical areas of China.

Efficiency assessment of industrial solid waste generation and treatment processes with carry-over in China

Industrial solid waste (ISW) harms the eco-environment as well as human health; thus, both the generation and treatment processes of ISW are important aspects of a reduction of discharged ISW. Currently, only part of the generated ISW is treated, while the remainder is stored for later treatment, which is referred to as carry-over between two adjacent periods. According to such a two-stage process (with carry-over), a network slacks-based measure model is proposed to measure the overall and divisional efficiencies of 30 Chinese regions during 2011–2015. The main findings are summarized in the following: firstly, failing to consider carry-over underestimates both overall and divisional efficiencies. Secondly, the average annual generation efficiency exceeded the average annual treatment efficiency during the study period; however, this gap increasingly narrowed. Thirdly, the overall efficiency is more closely related to the treatment efficiency than to the generation efficiency. Moreover, synergies were identified between generation efficiency and treatment efficiency for each region. Fourthly, significant regional differences affect both overall and divisional efficiencies, and significant stage efficiency differences also affect both coastal and inland areas. To increase the overall efficiencies of different regions of China, different policies are suggested.

PERFORMANCE EVALUATION OF TAIWANESE INTERNATIONAL TOURIST HOTELS: EVIDENCE FROM A MODIFIED NDEA MODEL WITH ICA TECHNIQUE

The motivation for this study is to assess the managerial performance in Taiwanese international tourist hotels based on the two-stage NDEA performance mechanism with ICA technique for enhancing the discriminatory power of performance evaluation model. The two-stage managerial performance structure is applied, incorporating the service production and service operation stages, as a reduced form to introduce the relatively complex business environment of modern enterprise. However, we have need to be considerable of dimensionality curse problem in NDEA performance model. A modified NDEA-based evaluation model, therefore, is proposed to integrate the network slacks-based measure (NSBM) with a dimensional reduction technique, the independent component analysis (ICA). The results indicate that the performance of the profit dimension significantly hampers operational performance, and that both regulators and managers must adjust their market orientation business strategy. Moreover, compared with the NSBM model, this modified ICA-NSBM performance model has a high discriminatory ability to measure the relative performance of the selected hotels.

Efficiency evaluation of China's provincial power systems based on the dynamic network slacks-based measure model

A power system contains generation, transmission, and distribution divisions. Policy reforms and management mechanisms may affect the environmental efficiency of certain divisions or the integrated power system. This study applied the dynamic network slacks-based measure (DNSBM) model to analyze the environmental efficiency of both the power systems and their divisions of provincial administrative areas in China and investigated the effects of the external environmental factors. It employed scenario analysis to further explore the feasibility of separating the distribution from the transmission division. The results indicate that: 1) The DNSBM model takes the internal structure of the power system into account and provides a new perspective to seek the sources of the system and division efficiencies. 2) Customer density and energy consumption intensity have significant impacts on the system and division efficiencies, while the power generation structure only affects the environmental efficiency of the generation division. 3) The scenario analysis shows that the policy of “separating power plants from grids” improved the system efficiency to which the improvement in generation division is the main contributor and “separating distribution from transmission” may have great potential for enhancing the efficiencies of power systems.

Market power and efficiency as the source of performance in banking: a case study of the Slovak banking sector

ABSTRACTIn an attempt to explain the sources of performance in the Slovak banking sector, the paper inquiries whether performance of Slovak banking institutions can be traced to market structure (as suggested by two market-power hypotheses) or should rather be attributed to efficiency (as postulated by two efficient-structure hypotheses). The empirical investigation is conducted with respect to two measures of banking performance and for a period of 11 years from 2005 to 2015 with some novel features in comparison to the state of the art in the field. First, the model of banking production accounts for both the intermediation and production aspects of banking operations and adapts the network slacks-based measure model in order to obtain trustworthy estimates of X-efficiencies and scale efficiencies. Second, the used simultaneous equations model involving all the four hypotheses of interest accommodates both performance measures at a time and avoids thus separate estimation. Third, the method of hypothesis verification hinges on testing composite hypotheses and refrains from step-wise estimation of nested models and significance testing of isolated parameters. A variant of the efficient-structure hypothesis in which both X-efficiency and scale efficiency exert its influence upon performance is established as descriptive for major Slovak commercial banking institutions.

Delivery efficiency and supplier performance evaluation in China’s E-retailing industry

This paper focuses on overall and sub-process supply chain efficiency evaluation using a network slacks-based measure model and an undesirable directional distance model. Based on a case analysis of a leading Chinese B2C firm W, a two-stage supply chain structure covering procurementstock and inventory-sale management is constructed. The research shows overall supply chain inefficiency is attributable to procurement-stock conversion inefficiency. From a view of operations model, the third-party platform model is more efficient than a “shop in shop” self-operated model. However, the self-operated mode performs better in product categories such as computer & Office & digital, food & drink and healthy products due to these products’ delivery characteristics and consumers’ shopping habits. In the logistics selection, most e-retail players are inclined to choose the hybrid model of 3PL and self-operated logistics with the product category extension from vertical model to all-category model. These findings may help managers improve supplier-buyer relationship and strengthen supply chain management. This research offers a new explanation regarding the failure of e-retail supply chain.

A novel fuzzy network SBM model for data envelopment analysis: A case study in Iran regional power companies

One of the most powerful and applicable tools to evaluate the efficiency of decision making units (DMUs) is data envelopment analysis (DEA). In order to evaluate the efficiency of multi-division DMUs, it is essential to pay attention to the internal or linking activities among their different divisions, and also, we have presented a model of DEA, due to uncertainty in some input and output indexes of units, which beside paying attention to internal or linking activities, the data have been entered into the model in a fuzzy form. The suggested model is a slacks-based measure (SBM) model which deals with evaluating the efficiency of DMUs. At the end, a case study on the Iran regional power companies using the suggested model is presented. Mean whilst the proposed model is compared with other existing models and the results prove its advantages as well as the validity of our model.

The impacts of risk-management committee characteristics and prestige on efficiency

We examine the effects of risk-management committee characteristics and prestige on efficiency, as well as the moderating effect of risk-management committee prestige on the association between risk-management committee characteristics and the efficiency of Malaysian insurance companies between 2008 and 2013. We apply the dynamic network slacks-based measure model to estimate efficiency, and truncated regression with a bootstrapping procedure to examine the impacts of risk-management committee characteristics and prestige on efficiency. We find significantly positive relationships among the variables, with the exception of the number of risk-management committee meetings. Furthermore, risk-management committee prestige could minimize the positive effect of risk-management committee characteristics on efficiency.

A study of the operation efficiency and cost performance indices of power-supply companies in China based on a dynamic network slacks-based measure model

This paper applies the dynamic network slacks-based measure model with free links and fixed links (hereafter referred to as DNSBM-Free and DNSBM-Fixed respectively) to evaluate the operational performance of 31 electric power-supply companies (hereafter referred to as EPCs) in China from 2010 to 2012. This approach allows for the consideration of the group heterogeneity of electric power transmission. This approach also considers the new structural reform in the power grid of China in the near future, i.e., the separation of the transmission division (hereafter referred to as T) and the distribution division (hereafter referred to as D). We extend several performance indices to measure the cost efficiency and technology gaps in electric power supply. We estimate the efficiencies of the EPCs under different policies. The results indicate that regional economic development level has a significant impact on the performance of the EPCs. Under the DNSBM-Free and DNSBM-Fixed models, while the efficiency of D was a slightly higher than that of T before separating T and D, however, the efficiency of D was significantly lower than that of T after separation. Conversely, divisional efficiencies of some companies show a significant gap between T and D. This suggests that policy-makers should seriously balance the pros and cons of separation policy before making decisions, and the EPCs in China focus on enhancing operating efficiency of D when deciding to separate T and D in the future. Furthermore, this paper speculates that the macro-economic environment influences the policy of separation of T and D.