Technical Efficiency (TE) in Malaysia Electric and Electronic Manufacturing Industry: A Stochastic Frontier Analysis (SFA) Approach

2021 ◽  
Vol 12 (1) ◽  
pp. 98-98
Author(s):  
Norayati Hashim ◽  
Mohd Fahmy Abdullah
Keyword(s):  
Technical Efficiency ◽  
Manufacturing Industry ◽  
Stochastic Frontier Analysis ◽  
Developing Economies ◽  
Stochastic Frontier ◽  
Value Added ◽  
The United States ◽  
Average Growth ◽  
Frontier Analysis ◽  
Major Player

The Electric and Electronic (E&E) manufacturing industry is becoming more important for Malaysia economy that contributes to the Gross Domestic Product (GDP) and provide huge in job creation. Hence, real GDP grew at an average rate of 6.1% per year over 1970 to 2018 period, higher than the average growth of the advanced countries (OECD Economic Surveys: Malaysia 2019, 2019). Furthermore, Malaysia is a major player in the fast-expanding E&E market, of which major export destinations include Singapore, Hong Kong, the USA, PRC, Japan and Europe. In 2019, 37.8% of Malaysia total exports were from E&E industry, which accounted for RM372.67 billion worth of exports or 44.7 per cent of all manufacturing goods exported (MITI, 2019). However, the E&E manufacturing industry is fluctuating and was inconsistent in Malaysia (MITI, 2014). Furthermore, the external environment continued to be affected by global economic uncertainty in 2012, dampening demand for the E&E manufacturing industry exports to decrease by 2.5 percent to RM231.2 billion and had an impact on the labour market with total retrenchments increased by 35.2 percent to 7616, due mainly to higher layoffs in the manufacturing industry (MITI, 2012). This effect is due to the sovereign debt crisis in Europe, the United States (US) economic recovery was modest, dampened by both domestic and external weaknesses and the stagnant economy in Japan had an impact on the export performance. In addition that growing competition from manufacturers in developing economies such as China and ASEAN member countries, particularly in higher value-added assembly (Bank Negara Malaysia, 2012). Hence, Malaysia economic landscape year 2012 became more challenging to uncertainty affected by an increasingly competitive global environment. Keywords: Technical Efficiency, Electric and Electronics, Stochastic Frontier Analysis (SFA), Translog, Panel Data.

Stochastic Frontier Analysis and Measurement of Productivity and Technical Efficiency of Indian Manufacturing Sector

2017 ◽  
Vol 5 (1) ◽  
pp. 52-69
Author(s):  
Manoj Kumar
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Manufacturing Sector ◽  
Stochastic Frontier ◽  
Value Added ◽  
Frontier Analysis ◽  
Use Of Resources ◽  
Plant Level ◽  
Indian Manufacturing Sector ◽  
Factor Inputs

It is generally believed the structural reforms that usher in competition and force companies to become more efficient were introduced later in India following the macroeconomic crisis in 1991. However, whether or not the post-1991 growth is an outcome of more efficient use of resources or greater use of factor inputs, especially capital, remains an open empirical question. In this article the author uses plant-level data from 1990 and 2015 to address this question. The results indicate that while there was an increase in the productivity of factor inputs during the 1990s, most of the growth in value added is explained by growth in the use of factor inputs. The author also finds that median technical efficiency declined in all but one of the industries between the two years, and change in technical efficiency explains a very small proportion in the change in gross value added.

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.

scholarly journals EFISIENSI TEKNIS, PERTUMBUHAN TEKNOLOGI DAN TOTAL FAKTOR PRODUKTIVITAS PADA INDUSTRI MENENGAH DAN BESAR DI INDONESIA

2018 ◽  
Vol 6 (1) ◽  
pp. 1-20
Author(s):  
Muhammad Fazri ◽  
Hermanto Siregar ◽  
Nunung Nuryartono
Keyword(s):  
Technical Efficiency ◽  
Manufacturing Industry ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Reform Era ◽  
Frontier Analysis ◽  
Tfp Growth ◽  
Technological Growth ◽  
Before And After ◽  
The Impact

Indonesia's economic growth this decade has good development. Not only growing but also more stable than before the reform era which is visible from the persistence of Indonesia at the level of positive growth during the economic crisis of 2008. Growth was good was followed by a change in the proportion of manufacturing industry in Indonesia which, if seen followed by a decrease in the production of some subsector indices industry. Total factor productivity (TFP) is one measure to look at other factors apart from the impact on production inputs such as technical efficiency and technological growth. In this study, in addition to trying to calculate TFP in some manufacturing industries subsector, in this study also wants to see the value of technical efficiency and the growth of the technology is a component of TFP calculations by the method of Stochastic Frontier Analysis (SFA). The results show that there is growing value of technical efficiency in some industries and most industries experienced relatively low growth of the technology. In the era before and after the crisis most of the industry has increased TFP growth but some industry decreased TFP growth. Keywords: SFA, Technical efficiency, Technological growth, TFP

scholarly journals PENGUKURAN ENVIRONMENTAL TECHNICAL EFFICIENCY INDUSTRI PENGOLAHAN DI JAWA TIMUR TAHUN 2006-2009

2016 ◽  
Vol 1 (1) ◽  
Author(s):  
Ratih Twi Septiriana
Keyword(s):  
Technical Efficiency ◽  
Co2 Emission ◽  
Manufacturing Industry ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Hyperbolic Distance ◽  
Environmental Characteristic ◽  
Frontier Analysis ◽  
Desirable Output ◽  
The One

CO2 emission is the greatest source of global warming that poses serious threats on environment, ecology, and socio-economic system. In the production process, CO2 is considered as undesirable output that always risesas long as desirable output is produced. Indonesia, as the one of the biggest emitter of CO2 emission, has been committing in reducing emission up to 26% for 2020. Using panel data, stochastic frontier analysis (SFA) has been used to evaluate the environmental technical efficiency of manufacturing industry in Java on 2006-2009. The translog hyperbolic distance function has been chose since this model can accommodate environmental characteristic of production technology. The empirical result shows the average environmental technical efficiency is 0,834. This study also investigates the factors that explain the level of environmental technical efficiency of firm. The results reveal that there are seven factors that significantly affecting environmental technical efficiency included: firm size, ownership status, foreign investment, type of industry, composition effect, scale effect, and technical effect. The finding of this paper indicate that environmental technical efficiency among manufacturing industry in Java still can be improved by focusing on those seven factor. 

scholarly journals EFISIENSI TEKNIS, PERTUMBUHAN TEKNOLOGI DAN TOTAL FAKTOR PRODUKTIVITAS PADA INDUSTRI MENENGAH DAN BESAR DI INDONESIA

2018 ◽  
Vol 6 (1) ◽  
pp. 1-20
Author(s):  
Muhammad Fazri ◽  
Hermanto Siregar ◽  
Nunung Nuryartono
Keyword(s):  
Technical Efficiency ◽  
Manufacturing Industry ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Reform Era ◽  
Frontier Analysis ◽  
Tfp Growth ◽  
Technological Growth ◽  
Before And After ◽  
The Impact

Indonesia's economic growth this decade has good development. Not only growing but also more stable than before the reform era which is visible from the persistence of Indonesia at the level of positive growth during the economic crisis of 2008. Growth was good was followed by a change in the proportion of manufacturing industry in Indonesia which, if seen followed by a decrease in the production of some subsector indices industry. Total factor productivity (TFP) is one measure to look at other factors apart from the impact on production inputs such as technical efficiency and technological growth. In this study, in addition to trying to calculate TFP in some manufacturing industries subsector, in this study also wants to see the value of technical efficiency and the growth of the technology is a component of TFP calculations by the method of Stochastic Frontier Analysis (SFA). The results show that there is growing value of technical efficiency in some industries and most industries experienced relatively low growth of the technology. In the era before and after the crisis most of the industry has increased TFP growth but some industry decreased TFP growth. Keywords: SFA, Technical efficiency, Technological growth, TFP

scholarly journals Technical Efficiency of Smallholder Tomato Production in Semi-Urban Farms in Cameroon: A Stochastic Frontier Production Approach

2017 ◽  
Vol 7 (4) ◽  
pp. 27 ◽  
Author(s):  
Martin Paul Jr. Tabe-Ojong ◽  
Ernest L. Molua
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Smallholder Farmers ◽  
Research Question ◽  
Stochastic Frontier ◽  
Negative Influence ◽  
Farm Size ◽  
Primary Data ◽  
Tomato Production ◽  
Frontier Analysis

Agriculture is the mainstay of Cameroon’s economy as it serves the purposes of food, livelihood and employment. Nevertheless, the country’s agriculture is plagued by low productivity and inefficiency in production. One of the main reasons for low productivity is the inability of farmers to fully exploit available technologies and production techniques. An important research question that comes to mind is, what are the major factors that hinder the technical efficiency of smallholder farmers? This study thus aimed to determine the level of technical efficiency in the production of tomato in smallholder farms, relying on primary data collected using a structured survey instrument administered to 80 tomato farmers in the Buea municipality of Cameroon. Data was analyzed using descriptive statistics and a stochastic frontier analysis method in the Cobb-Douglas production function. The STATA.14 software was used to obtain both stochastic frontier estimates and the determinants of technical efficiency. The results indicate that farmers are not fully technically efficient with a mean technical efficiency score of 0.68 with one farmer operating on the frontier. The study also revealed that most of the farmers irrespective of the size of the holdings have shown technical inefficiency problems. The older farmers were observed with the best measures of technical efficiency. Education, age and the adoption and practice of agronomic techniques had a positive and significant influence on technical efficiency while the nearest distance to the extension agent had a rather negative influence on technical efficiency. The input-output relationship showed that the area of tomato cultivation and the quantity of improved seed used were positive and significantly related to output at the 5% level of probability. As a result, it is recommended that farmers should increase their farm size, use of improved seeds and the adoption and practice of novel techniques in production. More emphasis should be placed on extension agents as they have a significant role to play in terms of improving and augmenting farmers’ education and information base through on farm demonstrations and result oriented workshops as all this will ensure increased production and productivity thereby increasing technical efficiency and achieving food self-sufficiency.

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.

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