Drivers of financial and operational efficiency of MFIs: empirical evidences from Eastern Europe and Central Asia

PurposeThe study attempts to examine the bias-adjusted financial and operational efficiency estimates of microfinance institutions (MFIs) operating in the Eastern Europe and Central Asia (ECA) region during the financial year 2017–2018. In addition, the study also identifies the responsible factors determining the financial and operational performances of MFIs operating in the ECA region.Design/methodology/approachThe study employs two-stage bootstrap data envelopment analysis (DEA). In the first stage, the authors incorporate the bootstrap procedure in the DEA framework as suggested by Simar and Wilson (2000) to estimate the bias-corrected efficiency scores of 67 sample MFIs. In order to identify the drivers of efficiency level, the study deploys the bootstrap truncated regression model following the Simar and Wilson (2007) guidelines in the second stage of analysis.FindingsThe authors note from the empirical results that MFIs operating in the ECA region are relatively more financially efficient (0.588) than socially efficient (0.496). However, none of the MFIs were found to be operating at best-practice frontier while considering the bias-adjusted efficiency estimates. Further, the results of second stage of analysis confirm that corporate governance, that is, board size has positive and statistically significant impact on MFIs’ performances. In addition, the bad credit quality deteriorates both financial revenue and operational efficiency. Moreover, the MFIs’ size, profit status and debt-to-equity ratio were also found to be statistically significant to determine the operational and financial efficiency of MFIs in the ECA region.Practical implicationsThe study provides the robust efficiency estimates and factors responsible to determine the financial and operational efficiency of MFIs operating in the ECA region. Further, the empirical results of the study provide the inputs and further direction to the policymakers, regulators, practitioners and managers in framing the policy and optimal operating strategies for ECA MFIs industry.Originality/valueThe study extends the DEA analysis by incorporating the bootstrap procedure in DEA model to estimate the bias-adjusted efficiency scores which are more reliable and robust. In addition, bootstrap truncated regression has been applied to identify the drivers of efficiency. Moreover, in the literature there is no single study which has deployed the double bootstrap DEA framework to examine the financial and operational efficiency estimates and its drivers.

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Financial Sustainability and Poverty Outreach: The Case of Microfinance Institutions in Eastern Europe and Central Asia

European Journal of Development Research ◽

10.1057/ejdr.2016.12 ◽

2017 ◽

Vol 29 (1) ◽

pp. 230-245 ◽

Cited By ~ 6

Author(s):

Ganna Sheremenko ◽

Cesar L Escalante ◽

Wojciech J Florkowski

Keyword(s):

Eastern Europe ◽

Central Asia ◽

Financial Sustainability ◽

Microfinance Institutions

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Productivity growth, catching-up and technology innovation in microfinance institutions in India: evidence using a bootstrap Malmquist Index approach

Benchmarking An International Journal ◽

10.1108/bij-10-2020-0535 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Asif Khan ◽

Rachita Gulati

Keyword(s):

Productivity Growth ◽

Productivity Index ◽

Productivity Change ◽

Microfinance Institutions ◽

Truncated Regression ◽

Content Type ◽

Tfp Growth ◽

Catching Up ◽

Double Bootstrap ◽

Size Groups

PurposeThis paper aims to examine the total factor productivity (TFP) change and its components: efficiency change and technical change in microfinance institutions (MFIs) in India operating from 2005 to 2018. The study also scrutinizes the variations in productivity levels across the distinct organizational form and size groups of MFIs. In addition to this, the authors identify the contextual factors that determine TFP growth, catching-up and technology innovation in MFIs.Design/methodology/approachThe study employs a smooth homogeneous bootstrap estimation procedure of Simar and Wilson (1999) for obtaining reliable estimates of Malmquist indices –productivity and its components – in a data envelopment analysis (DEA) framework for individual MFIs. In order to identify the determinants of productivity change and its components, the study follows Simar and Wilson's (2007) guidelines and applies a bootstrap truncated regression model. The double bootstrap procedure performs well, both in terms of allowing correct estimation of bias and deriving statistically consistent productivity estimates in the first and root mean square errors in the second stage of the analysis.FindingsThe empirical results reveal that the MFIs have shown average productivity growth of 6.70% during the entire study period. The observed productivity gains are primarily contributed by a larger efficiency increase at the rate of 4.80%, while technical progress occurs at 2.3%. Nonbanking financial companies (NBFC)-MFIs outperformed non-NBFC-MFIs. Small MFIs show the highest TFP growth in terms of size groups, followed by the large MFIs and medium MFIs. The bootstrap truncated regression results suggest that the credit portfolio, size and age of MFIs matter in achieving higher productivity levels.Practical implicationsThe practical implication drawn from the study is that the Indian MFI industry might adopt the latest technology and innovations in the products, risk assessment and credit delivery to improve their productivity levels. The industry must focus on enhancing the managerial skill of its employees to achieve a high productivity level.Originality/valueThis study is perhaps the initial attempt to explain the productivity behavior of MFIs in India by deploying a statistically robust double bootstrap procedure in the DEA-based Malmquist Productivity Index (MPI) framework. The authors estimate the bias-adjusted productivity index and its decompositions, which represent more reliable and statistically consistent estimates. For contextual factors responsible for driving productivity change, the study deploys a bootstrap truncated regression approach.

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The effect of market structure, regulation, and risk on banks efficiency

Journal of Economic Studies ◽

10.1108/jes-05-2012-0067 ◽

2014 ◽

Vol 41 (3) ◽

pp. 405-430 ◽

Cited By ~ 11

Author(s):

Aktham I. Maghyereh ◽

Basel Awartani

Keyword(s):

Market Structure ◽

Market Power ◽

Risk Taking ◽

Operational Efficiency ◽

Content Type ◽

Bootstrap Procedure ◽

Improve Efficiency ◽

Gcc Countries ◽

Double Bootstrap ◽

Efficiency Performance

Purpose – The purpose of this paper is to analyze the efficiency performance of the Gulf Cooperation Countries (GCC) banking sector. The primary focus is to assess whether market power, risk taking activities, and regulations have significant effects on GCC banks’ efficiency performance. Design/methodology/approach – The estimation and inference has been implemented using a double bootstrap procedure that simultaneously corrects for bias and validates inference on the influence of covariates. In the first stage, efficiency scores are estimated with data envelopment analysis (DEA). In the second stage, variation in the resulting efficiency scores is explained using a truncated regression model with inference based on a semi-parametric bootstrap routine. Findings – The authors found compelling evidence that efficiency is not independent of the market structure, the bank's risk taking activities, and the regulatory environment. In particular, the Lerner Index provides evidence that market power decreases efficiency. The capital adequacy, the supervisory power and the market discipline were all found to improve efficiency. Additionally, when the risk is measured by the Z-Score or even by the ratio of non-performing loans to total loans, it adversely affects efficiency. Research limitations/implications – The results of the current study have important implications for regulators and supervisors. Promoting banks’ competitive environment in the GCC countries through reducing the information barriers to entry, encouraging bank privatization, and lowering the activities restrictions can potentially improve operational efficiency of banks. Also enhancing banks’ diversification activities and risk management techniques may have the advantage of increasing operational efficiency. Furthermore, improvements in the regulatory conditions that enhance banking supervision and monitoring would also improve efficiency. Originality/value – The main contributions of the paper are threefold: first, to the knowledge, this study is the first to employ by far the most comprehensive data set of GCC banks investigated to date. Second, the analysis focusses on the influence of a wide set of factors, most of them was not covered before in related economic literature on bank efficiency of the GCC countries. Third, the methodological innovation involves applying a double bootstrap procedure proposed by Simar and Wilson (2007).

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The Cost Structure of Microfinance Institutions in Eastern Europe and Central Asia

SSRN Electronic Journal ◽

10.2139/ssrn.905911 ◽

2006 ◽

Cited By ~ 10

Author(s):

Valentina Hartarska ◽

Steven B. Caudill ◽

Daniel M. Gropper

Keyword(s):

Eastern Europe ◽

Central Asia ◽

Cost Structure ◽

Microfinance Institutions ◽

The Cost

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Advertising efficiency in the Spanish beer industry: spending too much?

International Journal of Wine Business Research ◽

10.1108/ijwbr-11-2017-0066 ◽

2018 ◽

Vol 30 (4) ◽

pp. 410-427 ◽

Cited By ~ 3

Author(s):

Ricardo Sellers-Rubio

Keyword(s):

Environmental Variables ◽

Data Envelopment ◽

Truncated Regression ◽

Content Type ◽

Second Stage ◽

Beer Industry ◽

Multiple Input ◽

Brand Portfolio ◽

First Time ◽

Advertising Efficiency

Purpose The purpose of this paper is to estimate advertising efficiency in the Spanish beer industry and to analyse the effects of several environmental variables and brand portfolio scope on advertising efficiency scores. Design/methodology/approach A two-stage double bootstrap procedure is used. In the first stage, advertising efficiency is estimated using a bootstrapped data envelopment analysis on a multiple input-output model of advertising. In the second stage, a bootstrapped truncated regression model is estimated to identify the determinants of advertising efficiency. Both stages are estimated simultaneously. The empirical application is carried out on a sample of Spanish brewers between 2007 and 2014. Findings Results show low advertising efficiency scores and highlight the effects that environment and brand portfolio scope have on these estimates. Originality/values For the first time, this paper analyses the effect of environmental variables and the brand portfolio scope on advertising efficiency in the beer industry.

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A comparative analysis of the practice and performance of microfinance institutions in Nigeria

International Journal of Social Economics ◽

10.1108/ijse-01-2016-0007 ◽

2017 ◽

Vol 44 (11) ◽

pp. 1522-1538 ◽

Cited By ~ 5

Author(s):

Abiola Ayopo Babajide ◽

Joseph Niyan Taiwo ◽

Kehinde Adekunle Adetiloye

Keyword(s):

Best Practice ◽

Sampling Procedure ◽

Financial Sustainability ◽

Microfinance Institutions ◽

Content Type ◽

Non Profit ◽

For Profit ◽

Multi Stage ◽

And Performance ◽

The Impact

Purpose The successful story of microfinance institutions is often tied to the practice and methods of credit delivery as evidence among international world class microfinance institutions across the globe. The purpose of this paper is to examine the impact of practice and methods of credit delivery employed by “non- profit” and “for-profit” microfinance institutions on financial sustainability and outreach programmes of the microfinance institutions in Nigeria. Design/methodology/approach The study adopts the survey research design and multi-stage stratified random sampling procedure to collect data from 372 senior management staff, managing directors and board members of microfinance institutions of both groups in Nigeria. Data collected were analyzed using descriptive statistics and multiple regressions analysis. Findings The findings suggest that the current practice and methods of credit delivery of microfinance in both “non-profit” and “for-profit” microfinance institutions have an inverse relationship with the financial sustainability and outreach programmes of the institutions. This study provides empirical evidence for the incessant failure of microfinance institutions in Nigeria. Research limitations/implications The study therefore recommends an immediate overhaul of the methodology and practice of microfinance institutions in the country to align with international best practice. Originality/value In spite of the huge literature on microfinance in Nigeria, there is not enough evidence to empirically prove that the practice of microfinance has affected the performance of the industry in Nigeria. This study sets out to fill that gap in the literature. The paper examines the practice of microfinancing in Nigeria vis-à-vis the performance of the microfinance institutions, categorized into NGO and microfinance bank “for-profit” institutions using international best practices from countries where microfinance is highly successful as a benchmark for deployment of microfinance in Nigeria, in order to proffer policy direction to stakeholders on steps to take to ensure viability in the microfinance subsector in Nigeria.

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Determinants of cargo and eco-efficiencies of global container shipping companies

The International Journal of Logistics Management ◽

10.1108/ijlm-01-2020-0016 ◽

2020 ◽

Vol 31 (4) ◽

pp. 753-775

Author(s):

Kuo-Cheng Kuo ◽

Wen-Min Lu ◽

Qian Long Kweh ◽

Minh-Hieu Le

Keyword(s):

Returns To Scale ◽

Ordinary Least Squares ◽

Environmental Issue ◽

Container Shipping ◽

Shipping Industry ◽

Truncated Regression ◽

Strategic Decisions ◽

Content Type ◽

Second Stage ◽

Variable Returns To Scale

PurposeThis study aims to evaluate cargo and eco-efficiency of global container shipping companies (CSCs) and explore the determinants of the CSCs' efficiencies. While the former is derived from the CSCs' operational perspective, the latter highlights environmental issue related to carbon emission reduction.Design/methodology/approachIn the first stage, a two-stage double bootstrap approach of data envelopment analysis (DEA) is applied to derive bias-corrected cargo and eco-efficiency of the top ten global CSCs under the variable returns to scale assumption. In the second stage, ordinary least squares and truncated regression are applied to examine determinants of the CSCs' efficiencies.FindingsThe DEA results reveal that the cargo efficiency of the CSCs is higher than their eco-efficiency by about 2.6% under variable returns to scale in DEA. However, the bias-corrected results show that the difference is 2.9%. The overall average efficiencies suggest that the CSCs can improve their cargo (eco) efficiency by 6.9% (10.8%). In the second stage, the regression results show that the numbers of ship, return on assets and asset turnover ratio are significantly related to both cargo and eco-efficiencies, whereas the total fleet capacity positively affects cargo efficiency.Research limitations/implicationsThe results of this study can help the inefficient CSCs make strategic decisions to improve their performance. For example, their business experience and capacity may be contributing to their efficiencies. However, this study only focuses on the container market among the three main markets, namely, dry bulk, wet bulk and container.Originality/valueThis study highlights an environmental issue in the shipping industry. While CSCs are operating their cargo efficiently in general, they should also put green initiatives into their business operations for the long-term sustainability.

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A Study of Different Types of Air Pollutants on the Efficiency of China’s Hotel Industry

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph16224319 ◽

2019 ◽

Vol 16 (22) ◽

pp. 4319 ◽

Cited By ~ 1

Author(s):

Xiaoying Guo ◽

Wei Wei ◽

Yang Li ◽

Lei-Ya Wang

Keyword(s):

Regression Model ◽

Air Pollutants ◽

Hotel Industry ◽

Operational Efficiency ◽

Operational Performance ◽

Truncated Regression ◽

Empirical Results ◽

Sensory Experiences ◽

Different Types

This study focuses on visible and invisible air pollutants and their impacts on China’s hotel industry. Overall, visible air pollutants may block the sights and sceneries and worsen the quality of visitors’ sensory experiences, and invisible air pollutants are unlikely to result in the same perceptions and sensations. Hence, different types of air pollutants may have various impacts on the hotel industry’s operational performance. We employed a bootstrapped truncated regression model to investigate whether different types of air pollutants had distinctive impacts on the hotel industry. The dataset consisted of 31 provinces of China for the period 2012–2015. Empirical results indicate that visible air pollutants significantly decrease the operational efficiency of China’s hotel industry, while invisible air pollutants insignificantly affect the hotel industry.

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