scholarly journals Firm-level Inefficiency in Post-transition Economies

2021 ◽  
Vol 7 (1) ◽  
pp. 34-43
Author(s):  
Valerija Botrić
Keyword(s):  
Transition Economies ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Innovation Activity ◽  
Firm Level ◽  
Technical Inefficiency ◽  
Frontier Analysis ◽  
Creative Commons ◽  
Government Sector ◽  
The Government

Firms in post-transition economies are frequently considered less efficient than those in more advanced market economies. By relying on the World Bank Enterprise Survey for the year 2019, firm-level technical inefficiency is estimated by the stochastic frontier analysis method for a sample of European post-transition countries. To be precise, the analysis included Albania, Bosnia and Herzegovina, Croatia, Czechia, Estonia, North Macedonia, Poland, Serbia, and Slovenia. Furthermore, the factors contributing to the firm-level inefficiency are explored in a comparative setting. The effects of the international orientation of the firm, foreign ownership, doing business with the government sector, presence of informal competitors, innovation activity, manager experience, and the age of the firm on the technical inefficiency are estimated. Results show that although some factors are common to a subsample of countries, not a single factor is significant in all the analysed economies. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

An Efficiency Analysis of Micro Units in a Fragile Zone: A Panel Study of the Firms in J&K, India

2021 ◽  
pp. 097492922110448
Author(s):  
Javaid Iqbal Khan ◽  
Mehak Majeed ◽  
Saeed Owais Mushtaq
Keyword(s):  
Stochastic Frontier Analysis ◽  
Small And Medium Enterprises ◽  
Panel Study ◽  
Stochastic Frontier ◽  
Negative Relationship ◽  
Jel Classification ◽  
Tobit Regression ◽  
Jammu And Kashmir ◽  
Frontier Analysis ◽  
The Government

The micro, small and medium enterprises (MSMEs) are the backbone of the community development in the developing world. In the fragile and backward regions, it is the micro enterprise that is considered to be the engine of growth and development. Being labour-intensive and requiring lesser capital input, the micro unit start-ups demand lesser investment in plant and machinery, attracting more and more potential entrepreneurs. Over the time, such units gain experience and knowledge becoming more efficient. This article studies the firms located in the fragile and geographically remote region of Jammu and Kashmir. The article uses a panel of 15 years from 2002 to 2016 based on the Annual Survey of Industries data. Using the Stochastic Frontier Analysis, the article studies the MSMEs and the micro units. From the post-estimation, technical efficiency scores are attained for both MSMEs and the micro units. The results reveal that the micro units are more efficient than the MSMEs in general. Tobit regression is used to estimate the technical inefficiency model to determine the factors that contribute to the inefficiency present in the micro units. The results show that there is a negative relationship between the efficiency of the micro unit firms and the asset-liability ratio and the loan-liability ratio, while there is a positive relationship between the private ownership of the firm and the efficiency level. Age of the firm is considered separately to validate the ‘learning theory’ by Jovanovic. The article concludes by suggesting that the government must provide adequate boost and a big-push to the micro units in order to eradicate the widespread unemployment and fragility in the region. JEL Classification: F61, L25

A Stochastic Frontier Analysis of Exporting Small and Medium Sized Enterprises in India

2016 ◽  
Vol 7 (3) ◽  
pp. 1-23
Author(s):  
Manoj Kumar
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Returns To Scale ◽  
Key Factors ◽  
Technical Inefficiency ◽  
Frontier Analysis ◽  
Efficiency Performance ◽  
Size Firm ◽  
Almost All

This study employs a stochastic frontier analysis (SFA) and technical inefficiency effects model to predict the technical efficiency of 3,168 Indian manufacturing and exporting SMEs, analyze their returns to scale and key factors impacting on their technical efficiency. Indian manufacturing and exporting SMEs extensively rely on labor rather than capital to increase their output, including almost all exporting SME groups, except those exporting to North & South America. The production of Indian manufacturing SMEs exporting to Oceania, however, has increasing returns to scale (1.1965). The inefficiency effects model reveals that firm size, firm age, foreign ownership, location and government assistance are firm-specific factors that significantly affect the technical inefficiency of production. Finally, evidence-based policies are also provided to facilitate improvement in the technical efficiency performance of Indian manufacturing and exporting SMEs.

scholarly journals Stochastic Frontier Analysis on Technical Efficiency of Strawberry Farming in Purbalingga Regency Indonesia

2020 ◽  
Vol 9 (2) ◽  
pp. 105
Author(s):  
Irene Kartika Eka Wijayanti, ◽  
Jamhari Jamhari, ◽  
Dwidjono, Hadi Darwanto ◽  
Any Suryantini
Keyword(s):  
Technical Efficiency ◽  
Formal Education ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Technical Inefficiency ◽  
Factors Affecting ◽  
Frontier Analysis ◽  
Central Java ◽  
Frontier Production Function ◽  
Central Java Province

The objective of this study is to determine technical efficiency and factors affecting technical inefficiency of strawberry farming in Purbalingga Regency. This study was conducted in Karangreja Subdistrict, Purbalingga Regency, Central Java Province. Purposive sampling method was utilized to select 100 farmers as the respondents. All of whom have been running their farm business for at least three years consecutively from 2015 to 2017. Stochastic frontier production function was applied to measure technical efficiency and factors affecting technical inefficiency. The findings show that strawberry farming in Purbalingga Regency, Central Java Province, is technically efficient with efficiency number varies between 26.50-99.40% and the average efficiency number of 77.80%. Furthermore, the results indicate that the farmers’ formal education and the number of household members significantly affect the technical efficiency of strawberry farming.

scholarly journals A Stochastic Frontier Approach to Measuring Inefficiency of Local Communities in Bosnia and Herzegovina

2021 ◽  
Vol 16 (1) ◽  
pp. 18-29
Author(s):  
Lejla Lazović-Pita ◽  
Lamija Šćeta
Keyword(s):  
Bosnia And Herzegovina ◽  
Local Community ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Local Communities ◽  
Data Availability ◽  
Future Research ◽  
Technical Inefficiency ◽  
Frontier Analysis ◽  
Selection Of Variables

Abstract The significance and methods of measuring inefficiency of local communities has been gaining prominence in the last decade. The purpose of this paper is to empirically investigate the level of technical inefficiency in the sample of local communities in Bosnia and Herzegovina (BiH) for the year of 2017. We implement parametric stochastic frontier analysis (SFA) to conduct an input-oriented stochastic parametric approach to measuring technical inefficiency of local communities in BiH. The results of our work are complementary to previous research indicating relative technical inefficiency of local communities in BiH. On average, BiH local communities’ total expenditures can be reduced by 46.8 percent without reducing output levels to achieve the result of the local community on the best practice frontier. Since our analysis and selection of variables are driven by data availability, the future research plans to include more variables.

scholarly journals Comparison of Cambodian Rice Production Technical Efficiency at National and Household Level

2017 ◽  
Author(s):  
Sokvibol Kea ◽  
Hua Li ◽  
Linvolak Pich
Keyword(s):  
Technical Efficiency ◽  
Capital Investment ◽  
Stochastic Frontier Analysis ◽  
National Level ◽  
Stochastic Frontier ◽  
Rice Production ◽  
Frontier Analysis ◽  
Household Level ◽  
The Government ◽  
National Analysis

Rice is the most important food crop in Cambodia and its production is the most organized food production system in the country. The main objective of this study is to measure technical efficiency (TE) of Cambodian rice production and also trying to identify core influencing factors of rice TE at both national and household level, for explaining the possibilities of increasing productivity and profitability of rice, by using translog production function through Stochastic Frontier Analysis (SFA) model. Four-years dataset (2012-2015) generated from the government documents was utilized for the national analysis, while at household-level, the primary three-years data (2013-2015) collected from 301 rice farmers in three selected districts of Battambang province by structured questionnaires was applied. The results indicate that level of rice output varied according to the different level of capital investment in agricultural machineries, total actual harvested area, and technically fertilizers application within provinces, while level of household rice output varied according to the differences in efficiency of production processes, techniques, total annual harvested land, and technically application of fertilizers and pesticides of farmers. The overall mean TE was estimated at 78.4% (national-level) and 34% (household-level), indicates that rice output has the potential of being increased further by 21.6% (national production) and 66% (household) at the same level of inputs and technology if farmers had been technically efficient. The TE also recorded -7% decreasing rate at the national-level and -14.3% at household-level due to highly affected of natural disasters and various environmental and social factors during the study periods.

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 Analysis of Factors Affecting the Technical Inefficiency on Indonesian Palm Oil Plantation

2021 ◽  
Author(s):  
Irawati Abdul ◽  
Dyah Wulan Sari ◽  
Tri Haryanto
Keyword(s):  
Production Function ◽  
Palm Oil ◽  
Household Income ◽  
Stochastic Frontier Analysis ◽  
Seed Quality ◽  
Stochastic Frontier ◽  
Technical Inefficiency ◽  
Factors Affecting ◽  
Frontier Analysis ◽  
Agricultural Business

Abstract This study aims to analyze the factors affecting the technical inefficiency of palm oil plantations in Indonesia by using the stochastic frontier analysis based on the translog production function. The data used in this study are taken from the Central Statistics Agency (Agricultural Business Household Income Survey) in 2013. The number of samples used was 14367 farmers. The results revealed that there is still to increase in the efficiency of palm oil plantations in Indonesia. The production function suggests that increasing the number of trees can help to increase the number of outputs. Additionally, education, age, planting system, seed quality, extension service, and plasma farmer significantly influence the technical efficiency of palm oil plantation.

scholarly journals TECHNICAL EFFICIENCY OF PADDY’S FARMING IN VARIOUS TYPES OF PADDY’S SEEDS IN INDONESIA

2020 ◽  
Vol 13 (3) ◽  
pp. 286
Author(s):  
Venessa Vasthi Winata ◽  
M. Rondhi ◽  
Yasuhiro Mori ◽  
Takumi Kondo
Keyword(s):  
Technical Efficiency ◽  
Formal Education ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Secondary Data ◽  
Household Survey ◽  
Rice Farming ◽  
Frontier Analysis ◽  
Rice Seeds ◽  
The Government

The increasing need for food along with increasing population is one of the problems that must be resolved by Indonesia nation. The government is trying to increase rice production and productivity by using certified seeds. Certified seeds is expected to affect technical efficiency of rice farming. The objectives of this studies are to analyze the level of technical efficiency and to identify the factors that influence the technical efficiency of rice farming in various types of main sources of rice seeds in Indonesia. The study uses secondary data that obtained from Central Bureau of Statistic (BPS) as a results from the 2014 Rice Plant Business Household Survey (SPD 2014). Data were analyzed using stochastic frontier. The results showed that the average technical efficiency level achieved by farmers in rice farming is 0,656 or less than 0,70 (<0,70) so it can be said that rice farming in Indonesia is still technically inefficient. Factors that affecting the technical efficiency of rice farming in various types of main sources of rice seeds in Indonesia were age, formal education, dummy participation of agricultural extension, and dummy certified seeds.  Keywords: certified seeds, rice farming, stochastic frontier analysis, technical efficiency, non-certified seeds

scholarly journals Productivity and Competitiveness of Garlic Production in Pasuquin, Ilocos Norte, Philippines

2021 ◽  
Vol 18 (1) ◽  
pp. 50-63
Author(s):  
Ceptryl S. Mina ◽  
◽  
Salvador P. Catelo ◽  
Carolyn D. Jimenez ◽  
◽  
...  
Keyword(s):  
Stochastic Frontier Analysis ◽  
Group Membership ◽  
Stochastic Frontier ◽  
The Philippines ◽  
Farm Size ◽  
Cost Ratio ◽  
Frontier Analysis ◽  
Use Of Resources ◽  
The Government ◽  
Productivity And Competitiveness

A total of 124 garlic farmers were selected and interviewed to evaluate the productivity and competitiveness of garlic farming in Pasuquin, Ilocos Norte, Philippines. The Technical efficiency (TE) was estimated using a stochastic frontier analysis or SFA based on the Cobb-Douglas production functional form, while the competitiveness of local garlic production was determined based on the ratio between import parity price and domestic resource cost ratio. The mean TE was 81 percent while the estimated gamma value was 0.92. These values indicate that 92 percent of the variation in garlic output is due to inefficiency factors and that total garlic output can further be increased with efficient use of resources. The analysis further revealed that seed rate and insecticides were statistically significant production factors. The results also show that group membership, farm size, and distance to the farm-to-market road (FMR) were statistically significant. Inefficiency factors and distance to the FMR have positive relationships while group membership and farm size have negative relationships with the garlic output. Price and cost ratios show that garlic from Pasuquin, Ilocos Norte could not yet compete with imported garlic from China in 2018. However, simulations show that if the Philippines can increase its national average by at least 20 percent (4.08 mt/ ha), it can have a competitive advantage in garlic production. The results of the analyses highlight the need to revisit the output and input policies and programs of the government to increase the productivity and competitiveness of garlic farming in Ilocos Norte. These programs include investing in quality seed, joining farmers’ organizations, and providing better farming infrastructure.

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