scholarly journals THE EFFECT OF FOREIGN DIRECT INVESTMENT SPILLOVER ON THE LEVEL OF TECHNICAL EFFICIENCY IN LARGE AND MEDIUM MANUFACTURING INDUSTRY IN EAST JAVA

2020 ◽  
Vol 5 (1) ◽  
pp. 6
Author(s):  
Ahmad Oktabri Widyananda ◽  
Dyah Wulan Sari
Keyword(s):  
Foreign Direct Investment ◽  
Technical Efficiency ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Positive Influence ◽  
Foreign Firms ◽  
Stochastic Frontier Approach ◽  
Firm Level

Foreign Direct Investment (FDI) takes an important role in the development process, especially in developing countries. The purpose of this study is to examine and analyze FDI spillover on the level of technical efficiency in the large and medium manufacturing industry in East Java. This study uses a time-varying stochastic frontier approach for firm-level panel data of the East Java manufacturing industry. The results show that all factors in this study affect the level of technical efficiency of large and medium industries in East Java. Variable foreign share, FDI horizontal spillover, and firm size have a positive influence on the technical efficiency of the industry. Whereas the variable FDI backward spillover, FDI forward spillover and the level of market concentration negatively affect the level of technical efficiency of the industry. Finally, it’s needed to build synergies and sustainable relationships between products produced by domestic and foreign firms. Thus, the presence of foreign firms in East Java could have a positive impact on improving the technical efficiency of the domestic industry both at the upstream and downstream levels. Keywords: Foreign Direct Investment Spillover, Technical Efficiency, East Java IndustryJEL Classification: F21, L60, D24

scholarly journals Does Foreign Presence Influence the Level of Firm Technical Efficiency? Evidence from Africa

2021 ◽  
Vol 6 (1) ◽  
pp. 1-20
Author(s):  
Anthony Orji ◽  
Jonathan E. Ogbuabor ◽  
Gabriel Chiangi Aza ◽  
Onyinye I. Anthony-Orji
Keyword(s):  
Foreign Direct Investment ◽  
West Africa ◽  
Technical Efficiency ◽  
Direct Investment ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Firm Level ◽  
Frontier Production Function ◽  
World Bank Enterprise Survey ◽  
The Impact

Abstract This study investigates the impact of foreign direct investment on the level of firm technical efficiency in West Africa. Firms from Nigeria, Ghana, Sierra Leone and the Gambia were sampled due to the fact that they used to belong to the British Empire. The data, sourced from the World Bank enterprise survey, covers the period from 2006 to 2018, with the sampled countries having data for different years. A time varying stochastic frontier production function for panel was developed for this enquiry. The findings of the study show that foreign direct investment has a significant and positive impact on both technical efficiency and productivity of firms in West Africa. Controlling for other effects, international trade and firm size both have positive and significant effects on firm level technical efficiency. Therefore, policies should be aimed at encouraging more inflows and maintenance of the stock of foreign direct investment to avert divestments. This includes, but is not limited to, ensuring sociopolitical stability and introducing policies that would remove bureaucratic bottlenecks from the path of direct investment inflow and simplify the process of doing business in these countries.

Foreign Direct Investment and Technology Spillovers in the Turkish Manufacturing Industry

2013 ◽  
pp. 30-51 ◽  
Author(s):  
Alper Sönmez ◽  
Mehmet Teoman Pamukçu
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Foreign Ownership ◽  
Output Growth ◽  
Foreign Firms ◽  
Technology Spillovers ◽  
Firm Level ◽  
Definition Of ◽  
Local Firms

Technology spillovers from foreign to local firms in emerging economies are considered to be the most important channel through which Foreign Direct Investment (FDI) influences the host economy. Empirical evidence about the existence, magnitude, and direction of FDI-related spillovers in these countries is contradictory, pointing to the necessity of conducting more econometric studies using firm-level data. The authors conduct an econometric analysis to assess the impact of FDI-related horizontal technology spillovers on output growth of local firms in the Turkish manufacturing industry over 2003-2006. When a broad definition of foreign ownership is adopted, their findings suggest that horizontal spillovers occur from foreign to local firms in the sector of activity. Export-oriented firms do not benefit from these spillovers in contrast to firms producing mainly for the local market. However, when foreign ownership is defined according to whether the minority or majority of capital is detained by the foreign partner, horizontal spillovers seem to originate from foreign firms with majority or full foreign ownership, while no such effect is associated with minority-owned foreign firms.

scholarly journals Agricultural Technical Efficiency of Smallholder Farmers in Ethiopia: A Stochastic Frontier Approach

Land ◽  
2021 ◽  
Vol 10 (3) ◽  
pp. 246
Author(s):  
Markose Chekol Zewdie ◽  
Michele Moretti ◽  
Daregot Berihun Tenessa ◽  
Zemen Ayalew Ayele ◽  
Jan Nyssen ◽  
...  
Keyword(s):  
Technical Efficiency ◽  
Crop Production ◽  
Large Scale ◽  
Positive Impact ◽  
Smallholder Farmers ◽  
Stochastic Frontier ◽  
Crop Productivity ◽  
Small Scale ◽  
Stochastic Frontier Approach ◽  
Small Scale Irrigation

In the past decade, to improve crop production and productivity, Ethiopia has embarked on an ambitious irrigation farming expansion program and has introduced new large- and small-scale irrigation initiatives. However, in Ethiopia, poverty remains a challenge, and crop productivity per unit area of land is very low. Literature on the technical efficiency (TE) of large-scale and small-scale irrigation user farmers as compared to the non-user farmers in Ethiopia is also limited. Investigating smallholder farmers’ TE level and its principal determinants is very important to increase crop production and productivity and to improve smallholder farmers’ livelihood and food security. Using 1026 household-level cross-section data, this study adopts a technology flexible stochastic frontier approach to examine agricultural TE of large-scale irrigation users, small-scale irrigation users and non-user farmers in Ethiopia. The results indicate that, due to poor extension services and old-style agronomic practices, the mean TE of farmers is very low (44.33%), implying that there is a wider room for increasing crop production in the study areas through increasing the TE of smallholder farmers without additional investment in novel agricultural technologies. Results also show that large-scale irrigation user farmers (21.05%) are less technically efficient than small-scale irrigation user farmers (60.29%). However, improving irrigation infrastructure shifts the frontier up and has a positive impact on smallholder farmers’ output.

scholarly journals GLOBAL SOURCING AND TECHNICAL EFFICIENCY – A FIRM-LEVEL STUDY ON THE ICT INDUSTRY IN SWEDEN

2017 ◽  
Vol 18 (5) ◽  
pp. 877-896 ◽  
Author(s):  
Martin ANDERSSON ◽  
Trudy-Ann STONE
Keyword(s):  
Technical Efficiency ◽  
Manufacturing Industry ◽  
Management Practices ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Efficient Production ◽  
Global Sourcing ◽  
Firm Level ◽  
Frontier Analysis ◽  
International Sourcing

We analyse the relationship between international sourcing, measured as imports of intermediate inputs, and the technical efficiency of firms in the information and communications technologies (ICT) manufacturing industry in Sweden. Using stochastic frontier analysis, we provide evidence that global sourcing improves firms’ capabilities to combine and re-combine inputs in productive ways, thereby increasing technical efficiency. We find a robust relationship between technical efficiency and international outsourcing. First, we find that firms that are deeply integrated into global sourcing networks are closer to their own production frontier. Second, firms that are engaged in international sourcing are also closer to the industry efficiency frontier. These findings are consistent with the argument that international sourcing stimulates firms’ capabilities by enabling them to identify and adopt higher quality inputs or more efficient production and management practices. These findings also suggest that the variety and extent of firms’ global sourcing networks constitute an important source of differences in efficiency levels among firms the ICT manufacturing industry.

Productivity growth in India's bakery manufacturing industry

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shiv Kumar ◽  
Abdulla ◽  
ChhatraPal Singh
Keyword(s):  
Technical Efficiency ◽  
Productivity Growth ◽  
Manufacturing Industry ◽  
Stochastic Frontier ◽  
Allocative Efficiency ◽  
Scale Efficiency ◽  
Firm Level ◽  
Indian States ◽  
Content Type ◽  
Bakery Industry

PurposeThe main aim of this paper is to examine the total factor productivity (TFP) and its components namely, technological change, technical efficiency change, scale change and allocative change in bakery industry in India.Design/methodology/approachThe study is based on panel data on 35 Indian states for the period 2009–2010 and 2012–2013. Stochastic frontier function is employed to estimate the productivity growth.FindingsThe results show that TFP is driven by technological progress, followed by technical efficiency and scale efficiency. Allocative efficiency, however, has a negative effect on TFP.Research limitations/implicationsThe bakery industry needs to define its innovation strategies, as these strategies lead to different outcomes that can be achieved only through the management of resources dedicated to the generation and implementation of innovations.Originality/valueUsing frontier production function takes the stochastic context into account for the dynamic behaviour of TFP and its components. Most of the past studies have assessed the TFP at the aggregate level using three-digit National Industrial Classification (NIC) or four-digit NIC code. An analysis at higher levels aggregation masks the variation in TFP and its components available at the firm level. This study uses five-digit NIC data to measure the firm specific TFP of bakery industry. Further, it looks at the contribution of technical progress (TP), technical efficiency, scale efficiency and allocative efficiency.

scholarly journals Environmental Regulations, Competition and Divestment of Foreign Direct Investment: Evidence from China

2021 ◽  
Author(s):  
Lufeng Tai ◽  
Linnan Yan
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Negative Impact ◽  
Environmental Regulations ◽  
Foreign Firms ◽  
Mechanism Analysis ◽  
Firm Level ◽  
Foreign Companies ◽  
Empirical Significance ◽  
Exit Probability

Abstract This paper is concerned with whether the Chinese increasingly stringent environmental regulations (ER) lead to the divestment of foreign direct investment (FDI). Based on industrial firm-level panel data from 2003 to 2010, our results show that the stricter ER do not induce the divestment of FDI but rather reduce the probability of foreign firms’ withdrawal from China. Moreover, in cities with a higher degree of marketization, the ER have greatly reduced the exit probability of foreign firms. The mechanism analysis shows that due to the scale and technological advantages of foreign companies, the ER have stimulated innovation, increased the market share and profits of foreign companies. However, the ER have a greater negative impact on domestic firms’ performance. This research has theoretical and empirical significance for the economic development and environmental protection of developing countries.

Technical Efficiency and Total Factor Productivity Growth of Indonesian Manufacturing Industry: Does Openness Matter?

2021 ◽  
pp. 232102222110244
Author(s):  
Mohammad Zeqi Yasin
Keyword(s):  
Technical Efficiency ◽  
Total Factor Productivity ◽  
Absorptive Capacity ◽  
Manufacturing Industry ◽  
Raw Material ◽  
Foreign Firms ◽  
Factor Productivity ◽  
Stochastic Production Frontier ◽  
Firm Level ◽  
Tfp Growth

In this paper, we examine the contribution of openness variables such as import, export, absorptive capacity and foreign-shared capital to Indonesian firms’ technical efficiency and total factor productivity (TFP) growth. We use the most recent firm-level panel data of 23 subsectors in the manufacturing industry over the period from 2008 to 2015. We employ time-varying stochastic production frontier to examine factors affecting technical efficiency and to decompose the components of TFP growth. The results reveal that export and absorptive capacity alone contribute to the efficiency improvement of the firms under study. To speak specifically of foreign firms, they contribute to improving efficiency if they interact with absorptive capacity and imported raw material intensity. We identify that, on an average, the manufacturing industry in Indonesia experienced positive TFP growth. However, among 23 subsectors, there are only few subsectors that benefitted from the openness variables. In 2014, 15 out of 23 subsectors experienced negative TFP growth. This implies that, in 2014, there were some macroeconomic issues regarding the contracted policy, for example, the subsidy removal and the basic electricity tariff. JEL Classification: C23, D24, F23, O14

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