scholarly journals The impact of oil prices and the financial market on cost efficiency in the insurance and Takaful sectors: Evidence from a stochastic frontier analysis

2019 ◽  
Vol 43 (3-4) ◽  
pp. 100716 ◽  
Author(s):  
Ahmad Alrazni Alshammari ◽  
Syed Musa Alhabshi ◽  
Buerhan Saiti
Keyword(s):  
Financial Market ◽  
Cost Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Oil Prices ◽  
Frontier Analysis ◽  
The Impact

scholarly journals Using Environmental, Social, Governance (ESG) and Financial Indicators to Measure Bank Cost Efficiency in Asia

2021 ◽  
Vol 13 (20) ◽  
pp. 11139
Author(s):  
Hai-Yen Chang ◽  
Lien-Wen Liang ◽  
Yu-Luan Liu
Keyword(s):  
Cost Efficiency ◽  
Banking Sector ◽  
Stochastic Frontier Analysis ◽  
Developing Economies ◽  
Stochastic Frontier ◽  
Financial Indicators ◽  
Frontier Analysis ◽  
Asian Economies ◽  
Cost Efficient ◽  
The Impact

Environmental, social, and governance (ESG) practices have been used as non-financial indicators to measure bank performance worldwide in the last decade. The United Nations (UN) has specified 17 Sustainable Development Goals (SDGs) for the implementation of these ESG concepts. However, it remains unclear whether the costs of ESG have exceeded the benefits. The purpose of this study is to examine the impact of ESG on the cost efficiency of developed and developing Asian banks using a two-step approach comprising stochastic frontier analysis (SFA) and stochastic metafrontier analysis (SMF). The data sample from 2015 to 2018 is separated into two groups: 60 Asian developed economies and 85 developing economies. The results show that banks in the developed Asian economies become more cost-efficient through environmentally friendly activities. The banks in the developing Asian economies increase their cost efficiency by socially responsible activities and improved governance. Moreover, banks in the developed Asian economies outperformed those in the developing Asian economies in terms of technology gap ratio (TGR) and metafrontier cost efficiency (MCE). The results of this study benefit not only investors and bank managers but also the entire banking sector and the world economy.

scholarly journals International R&D Spillovers and Innovation Efficiency

2018 ◽  
Vol 10 (11) ◽  
pp. 3974 ◽  
Author(s):  
Jianping Liu ◽  
Kai Lu ◽  
Shixiong Cheng
Keyword(s):  
Capital Stock ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Sensitivity Analyses ◽  
Frontier Analysis ◽  
Country Level ◽  
Scientific Papers ◽  
Catch Up ◽  
The Right ◽  
The Impact

The objective of this study is to examine the impact of international research and development (R&D) spillovers on innovation efficiency of specific R&D outcomes, employing the country-level panel data for 44 countries in the 1996–2013 period. Fully considering the heterogeneity of different R&D outputs, scientific papers, PCT (Patent Cooperation Treaty) patents, US patents, and domestic patents are observed separately, which enriches the angles of measuring international R&D spillovers. By applying a stochastic frontier analysis to knowledge production function, we find that foreign R&D capital stock positively contributes to the innovation efficiency of scientific papers, but suppresses the productivity of domestic patents, whereas it does not really matter for PCT or US patents. These results are robust to control for a set of institutional factors and also in sensitivity analyses. Hence, dependence on international R&D spillovers seems neither to be the right way for emerging economies to catch up, nor to be a sustainable model for developing countries to fill the technical gap. Local R&D capital stock, instead, keeps an essential contributor to all four R&D outputs, so raising internal R&D expenditure is actually the key to improving innovation level and sustainable development ability.

Intellectual capital: a determinant of firms' operational efficiency

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kanishka Gupta ◽  
T.V. Raman
Keyword(s):  
Intellectual Capital ◽  
Stochastic Frontier Analysis ◽  
Stock Exchange ◽  
Stochastic Frontier ◽  
Value Added ◽  
Financial Sector ◽  
Operational Efficiency ◽  
Content Type ◽  
Frontier Analysis ◽  
The Impact

PurposeIntellectual capital (IC) has been recognized in improving the efficiency of businesses and gaining competitive edge in the developed world. The present study offers perspectives into the effect of IC on the efficiency of the Indian financial sector companies.Design/methodology/approachFor the purpose of evaluating efficiency, the research has used stochastic frontier analysis (SFA). All Indian financial sector companies listed in National Stock Exchange (NSE-500) for the timeframe of ten years (2008–2018) have been considered. The paper has employed modified Pulic's Value Added Intellectual Coefficient (VAICTM) as a proxy to measure IC. Correlation and panel data regression have been used in order to examine the relationship.FindingsThe results of the study indicate positive and significant relationship between IC and efficiency of the firm. The results also show that all the components of IC, that is, human capital, relational capital, process capital and capital employed have a significant impact on firms' efficiency. Additionally, it has been seen that sample companies do not invest in research and development leading to no innovation capital.Practical implicationsThe research will assist managers in managing and controlling the IC, investors in matters related to investment and financial experts in improving the company's IC and value creation.Originality/valueThe current research is one of the pioneering studies in the context of Indian financial sector that examines the impact of modified VAIC on operational efficiency calculated using SFA.

scholarly journals The Impact of Urbanization on Farmland Productivity: Implications for China’s Requisition–Compensation Balance of Farmland Policy

Land ◽  
2020 ◽  
Vol 9 (9) ◽  
pp. 311 ◽  
Author(s):  
Zhongqi Deng ◽  
Qianyu Zhao ◽  
Helen X. H. Bao
Keyword(s):  
Labor Force ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Agricultural Labor ◽  
Frontier Analysis ◽  
Conservation Policies ◽  
Use Efficiency ◽  
Urbanization Rate ◽  
Impact Of Urbanization ◽  
The Impact

The rapid growth of China’s economy since the reform in 1978 should be largely attributed to urbanization. Nonetheless, in terms of farmland productivity, urbanization may lead to perverse incentives and thus threaten food security. On the one hand, the requisition–compensation balance of farmland (RCBF) policy could reduce farmland productivity because of a “superior occupation and inferior compensation”; on the other hand, urbanization promotes the transfer of the younger labor force and thus reduces the productivity of the agricultural labor force. To investigate the undesirable effects, based on some stylized facts, this study selects 29,415 county-level samples in a Chinese county from 2000–2014 to construct an empirical model. With a new stochastic frontier analysis method that eliminates the classical econometric issues of endogeneity and heterogeneity, the empirical results show that there is a U-shaped relationship between the farmland use efficiency (productivity) and urbanization rate, indicating that only when the urbanization rate is relatively low would urbanization decrease the farmland use efficiency; in contrast, when the urbanization rate is relatively high, technical progress would obviously be accompanied by urbanization, and thus, the undesirable effects are fully offset. Furthermore, the U-shaped relationship is robust after considering the endogeneity of the urbanization rate and total-factor farmland use efficiency. With these findings, recommendations to implement sustainable management and conservation policies regarding farmland resources are made.

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.

scholarly journals Measuring Cost Efficiency of Ukrainian Banks in 2008

2013 ◽  
Vol 15 (4) ◽  
pp. 207-217 ◽  
Author(s):  
Anatoliy Pilyavskyy ◽  
Yuriy Matsiv ◽  
Olga Vovchak
Keyword(s):  
Cost Efficiency ◽  
Stochastic Frontier Analysis ◽  
Functional Form ◽  
Statistical Tests ◽  
Stochastic Frontier ◽  
Frontier Analysis ◽  
Average Value ◽  
Personnel Costs ◽  
Banking Activity ◽  
Size Type

The paper presents the results of a stochastic frontier analysis (SFA) of cost-efficiency of Ukrainian banks. As of lack of data on the personnel costs, we had to set limits to the year of 2008 only. To modeling banking activity, we apply the intermediary approach as one of the most commonly used in literature. Considering the results of statistical tests, we chose translog functional form of cost function and half–normal distribution of random inefficiency term. As a result of the research, we found out that efficiency of Ukrainian banks varies within 0.5224 and 0.9869 with an average value of 0.8734. Having checked a range of hypotheses, we discovered insignificant distinctions among banks by their size, type of owner and location.

Sign in / Sign up

Export Citation Format

Share Document