Bank branch performance and cost efficiency: A stochastic frontier panel data approach

2020 ◽  
Author(s):  
Idaira Cabrera‐Suárez ◽  
Jorge V. Pérez‐Rodríguez
Keyword(s):  
Panel Data ◽  
Cost Efficiency ◽  
Stochastic Frontier ◽  
Bank Branch

Technical efficiency and its determinants in the Indian textile garments industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdulla ◽  
Shiv Kumar
Keyword(s):  
Panel Data ◽  
Technical Efficiency ◽  
Textile Industry ◽  
Small And Medium Enterprises ◽  
Stochastic Frontier ◽  
Efficiency Score ◽  
Value Chains ◽  
Small Scale ◽  
Content Type ◽  
Medium Enterprises

Purpose This paper aims to examine technical efficiency and its determinants in Indian textile garments industry in post-agreement on textiles and clothing regime and evaluate the technical efficiency among micro, small and medium enterprises (MSMEs) firms. Design/methodology/approach This study uses unbalanced panel data for the period 2005–2010 to 2015–2016. The stochastic frontier function is used to estimate technical efficiency and its determinants. Findings The results show that the overall ecosystem of textile garments’ value chains could be improved to enhance the technical efficiency thereof. The result also reveals that small-scale firms have the highest technical efficiency scores, and medium-scale firms have the least technical efficiency score among all the categories of MSMEs. Research limitations/implications The textile garments industry needs to define its innovation strategies, as these strategies lead to different results that can be achieved only through the management of resources dedicated to the generation and implementation of innovations. Practical implications This study has shown that to offset India’s cost disadvantage in the international markets, there is a need to develop an ecosystem of textile manufacturing and value chains, eliminate the inverted duty structure (where inputs are taxed at a higher rate than the final product) and switch over from shuttle looms toward shuttle-less looms. This would unleash the potential of textile and garments industry and make it globally competitive and technically efficient. Further, there will be an alignment with the ease of doing business with an appropriate mix of policy, technology, institution, infrastructure, information and services. Originality/value Using frontier production function takes stochastic context into account for the dynamic character of technical efficiency and its components. Most of the past studies have assessed technical efficiency at the aggregate level using three-digit National Industrial Classification (NIC) or four-digit NIC code. An analysis at higher levels of aggregation masks the variation in technical efficiency. This study used five-digit NIC data to measure the firm-specific technical efficiency of the textile industry. According to the authors’ knowledge, this study is the first of its kind in the Indian textile industry using stochastic frontier approach and panel data. Further, it also looks at the contribution of different determinants in technical efficiency to the firms.

scholarly journals Mergers decision in Japanese small mutual banks: efficiency improvement or empire buildings?

2009 ◽  
Vol 7 (2) ◽  
pp. 117-125 ◽  
Author(s):  
Nobuyoshi Yamori ◽  
Kozo Harimaya
Keyword(s):  
Cost Efficiency ◽  
Stochastic Frontier ◽  
Efficiency Improvement ◽  
Important Goal ◽  
Stochastic Frontier Approach ◽  
Credit Associations ◽  
Bank Managers ◽  
The World ◽  
Mutual Banks ◽  
Credit Association

With the number of bank consolidations increasing around the world since the 1990s, several studies have examined what factors drive banks to consolidate, and some argue that bank managers who have a motive of empire buildings choose mergers. In this study, we deal with mergers among Japanese small mutual banks (credit associations or Shinkin banks) during the period 1996 to 2005. Japanese credit associations have been experiencing an unprecedented wave of consolidation, with their number decreasing from 410 (March 1996) to 292 (April 2006). Interestingly, unlike stock companies, mutual companies are often expected to be weak in terms of disciplining managers. If so, mutual banks tend to choose inefficient mergers at the expense of other stakeholders. Here, we use the stochastic frontier approach (SFA) to obtain “cost efficiency” proxy. We find that while the efficiency of acquiring credit associations decreases during the merger period, mergers do ultimately improve efficiency. Based on our results we find that raising efficiency, not for building empires, is an important goal for such credit association mergers.

scholarly journals Determinants and Differences of Grain Production Efficiency Between Main and Non-Main Producing Area in China

2019 ◽  
Vol 11 (19) ◽  
pp. 5225
Author(s):  
Furong Chen ◽  
Yifu Zhao
Keyword(s):  
Panel Data ◽  
Technical Efficiency ◽  
Production Function ◽  
Production Efficiency ◽  
Stochastic Frontier ◽  
Grain Production ◽  
Marginal Productivity ◽  
Rural Labor ◽  
Stochastic Frontier Production Function ◽  
Frontier Production Function

This paper investigated the determinants, especially labor transformation, and differences of technical efficiency between main and non-main grain-producing area in China based on a panel data from 30 provinces in the period of 2001–2017. Stochastic frontier production function was used to estimate the level of technical efficiency and the marginal productivity of different inputs. The estimated results showed that land is the most important factor to improve China’s grain output, followed by fertilizers, labor, and machinery inputs. There was a significant 4.6 percent gap of production efficiency between main and non-main producing provinces. Influence of rural labor transformation was confirmed to be positive to improve technical efficiency.

scholarly journals An Analysis of Energy Use Efficiency in China by Applying Stochastic Frontier Panel Data Models

Energies ◽  
2020 ◽  
Vol 13 (8) ◽  
pp. 1892 ◽  
Author(s):  
Xiaoyan Zheng ◽  
Almas Heshmati
Keyword(s):  
Energy Efficiency ◽  
Panel Data ◽  
Energy Policy ◽  
Energy Use ◽  
Stochastic Frontier ◽  
Control Variables ◽  
Energy Use Efficiency ◽  
Level Data ◽  
Use Efficiency ◽  
Province Level

This paper investigates energy use efficiency at the province level in China using the stochastic frontier panel data model approach. The stochastic frontier model is a parametric model which allows for the modeling of the relationship between energy use and its determinants using different control variables. The main control variables in this paper are energy policy and environmental and regulatory variables. This paper uses province level data from all provinces in China for the period 2010–2017. Three different models are estimated accounting for the panel nature of the data; province-specific heterogeneity and province-specific energy inefficiency effects are separated. The models differ because of their underlying assumptions, but they also complement each other. The paper also explains the degree of inefficiency in energy use by its possible determinants, including those related to the public energy policy and environmental regulations. This research supplements existing research from the perspective of energy policy and regional heterogeneity. The paper identifies potential areas for improving energy efficiency in the western and northeastern regions of China. Its findings provide new empirical evidence for estimating and evaluating China’s energy efficiency and a transition to cleaner energy sources and production.

scholarly journals The cost efficiency of Vietnamese banks – the difference between DEA and SFA

2020 ◽  
Vol 22 (2) ◽  
pp. 209-227
Author(s):  
Phong Hoang Nguyen ◽  
Duyen Thi Bich Pham
Keyword(s):  
Cost Efficiency ◽  
Stochastic Frontier Analysis ◽  
Random Noise ◽  
Stochastic Frontier ◽  
Time Consistency ◽  
Efficiency Frontier ◽  
Content Type ◽  
Frontier Analysis ◽  
The Difference ◽  
The Cost

PurposeThe paper aims to enrich previous findings for an emerging banking industry such as Vietnam, reporting the difference between the parametric and nonparametric methods when measuring cost efficiency. The purpose of the study is to assess the consistency in issuing policies to improve the cost efficiency of Vietnamese commercial banks.Design/methodology/approachThe cost efficiency of banks is assessed through the data envelopment analysis (DEA) and the stochastic frontier analysis (SFA). Next, five tests are conducted in succession to analyze the differences in cost efficiency measured by these two methods, including the distribution, the rankings, the identification of the best and worst banks, the time consistency and the determinants of efficiency frontier. The data are collected from the annual financial statements of Vietnamese banks during 2005–2017.FindingsThe results show that the cost efficiency obtained under the SFA models is more consistent than under the DEA models. However, the DEA-based efficiency scores are more similar in ranking order and stability over time. The inconsistency in efficiency characteristics under two different methods reminds policy makers and bank administrators to compare and select the appropriate efficiency frontier measure for each stage and specific economic conditions.Originality/valueThis paper shows the need to control for heterogeneity over banking groups and time as well as for random noise and outliers when measuring the cost efficiency.

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