scholarly journals Technical Efficiency of the Malaysian Wooden Furniture Industry: A Stochastic Frontier Production Approach

2010 ◽  
Vol 3 (3) ◽  
pp. 10 ◽  
Author(s):  
Alias Radam ◽  
Mohd Rusli Yacob ◽  
Huda Farhana Mohd Muslim
Keyword(s):  
Technical Efficiency ◽  
Manufacturing Sector ◽  
Stochastic Frontier ◽  
Production Model ◽  
Furniture Industry ◽  
Conventional View ◽  
Maximal Output ◽  
Wood Furniture ◽  
Wooden Furniture ◽  
Medium Firms

Wood furniture industry is an important component in our manufacturing sector for it significantly contributes to the industrialization of Malaysia’s economy. Evaluating wood furniture industry’s level of efficiency is important to assist and provide a relative direction to small and medium firms on their business. The objective of this research is to examine the efficiency of wooden furniture industry by determining the technical efficiency using stochastic frontier production model. Results show that firm output is 54 per cent less than the maximal output which can be achieved from the existing inputs. The technical inefficiency on individual firm varies from 1.63 to 94.69 per cent and so does the potential to increase firm output from the existing inputs. This evidence suggests that many firms still operate below the efficiency level, confirming the conventional view that labor-intensive firms are most likely inefficient.

scholarly journals Technical Efficiency and Technical Change in Canadian Manufacturing Industries

2014 ◽  
Vol 2014 ◽  
pp. 1-8
Author(s):  
Samuel Gamtessa
Keyword(s):  
Technical Efficiency ◽  
Technical Change ◽  
Fixed Effects ◽  
Manufacturing Sector ◽  
Stochastic Frontier ◽  
Manufacturing Industries ◽  
Omitted Variables ◽  
Dynamic Panel ◽  
Data Set ◽  
Canadian Manufacturing

This study applies the “true fixed effects” panel stochastic frontier methodology to the Canadian KLEMS data set to estimate technical change and technical efficiency in the Canadian manufacturing sector. To account for the endogeneity of capital inputs as well as the possible problems related to omitted variables, a two-stage residual inclusion method is pursued. The first stage is estimated using the dynamic panel GMM method. The results show that Canadian manufacturing industries experienced significant declines in technical efficiencies during the last ten years. This suggests that the observed slowdown in TFP growth during the recent past is partly due to declining technical efficiency.

scholarly journals Formation and Efficient Estimation of Stochastic Frontier Production Function

2021 ◽  
Vol 9 (4) ◽  
Author(s):  
N. J Dhanesh
Keyword(s):  
Technical Efficiency ◽  
Production Function ◽  
Stochastic Frontier ◽  
Efficient Estimation ◽  
Production Functions ◽  
Production Model ◽  
Stages Of Growth ◽  
Stochastic Frontier Production Function ◽  
Plantation Crops ◽  
Frontier Production Function

Technological change and efficiency improvement are important sources of productivity growth in any economy. The concept of technical efficiency (TE) is based on input and output relationships. Technical inefficiency arises when actual or observed output from a given input mix is less than a possible mix. The analysis of technical efficiency involves the assessment of the degree to which the production technologies are utilized. The present investigation on “Formation and efficient estimation of stochastic frontier production functions” was carried out in the Department of Agricultural Statistics, College of Horticulture, Vellanikkara, during 2010 -13. To assess the present economics of pepper cultivation, to formulate a new stochastic frontier production function and to compare different stochastic frontier production functions. The secondary data on the area of holdings, number of vines, yield, expenses for machinery, labour, manure, and other expenses for the cultivation of the major spice pepper collected from the Department of Plantation Crops and Spices, College of Horticulture, Vellanikkara were used for the analysis. For the stochastic frontier production model to be realistic, an exact measurement of the cost of the inputs and the realized output is extremely necessary. Very few farmers keep records of the expenditure incurred on the various inputs and rarely the output realized. Vegetable crops have a short duration. So the farmer will be in a position to give realistic figures regarding the various inputs as also the outputs. As regards plantation crops, there will be a lag right from the establishment of the crop to the steady bearing stage. Therefore, it will be very difficult to trace back the exact cost, as no records would be available about the costs incurred. Therefore, a rapid estimation survey is the only feasibility wherein simultaneous estimation of the costs involved from the nursery through the various stages of growth can be observed. Since a farmer who is already having a steady-bearing crop would have incurred lesser costs through the previous stages of growth of the crop, it is most feasible to use the concept of present worth to arrive at the exact costs of previous stages of the crop. The stochastic frontier analysis was done using the present value (PV) and the present cost.

scholarly journals The Dynamics and Sources of Technical Efficiency of the Manufacturing Industries in Bangladesh

2020 ◽  
Author(s):  
Sheikh Jafar Emran ◽  
Md. Moniruzzaman
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Returns To Scale ◽  
Manufacturing Industries ◽  
Efficiency Gain ◽  
Firm Characteristics ◽  
Frontier Analysis ◽  
Textile And Apparel ◽  
Wooden Furniture

Abstract This paper aims to analyze the dynamics of technical production efficiency of the manufacturing sector in Bangladesh using the cross-sectional data collected under the Survey of Manufacturing Industries (SMI) conducted in 2006 and 2012. Based on the dynamics of mean efficiency scores among the industries derived using Stochastic Frontier Analysis(SFA) techniquewith Cobb-Douglas technology with half-normal distribution during the considered period three most efficiency gainer industries are ((i) Jute textile,(ii) Dying and bleaching of textiles, and(iii) Bidies respectively. On the other hand, under SFA specification with Translog production function top three efficiency gainers are (i) Jute textile,(ii) Bidies, and(iii) Fish, Crustaceans and Molluses respectively. Under constant returns to scale in Data Envelopment Analysis(DEA), based on the mean efficiency score top three efficiency gainers are(i) Fibre textile,(ii) Embroidery of textile and apparel, and(iii) Wooden furniture and fixture respectively while undervariable returns to scale top three gainers are(i) Fibre textile,(ii) Embroidery of textile and apparel, and(iii) Wooden furniture and fixture respectively. Whatever technique we employ, we find that most cases garments or garments related industries remain among top performers in terms of efficiency gain. This indicates that garments industries have improved significantly in terms of efficiency to survive in world competition. Moreover, our results suggest that firm characteristics, location factors as well as ownership features are more important jointly rather than individually to enhance efficiency. Locational and ownership characteristics jointly, in most cases, are also not so influential in pulling the efficiency measures up. However, the firm characteristics are very important in raising the technical efficiency of the firms, especially in case of stochastic frontier analysis. And firm characteristics shows stronger impacts in interaction with other locational and/or ownership characteristics.

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 Farmers’ Efficiency Enhancement Through Input Management: The Issue Of USG Application In Modern Rice

1970 ◽  
Vol 36 (1) ◽  
pp. 129-141 ◽  
Author(s):  
M Shahe Alam ◽  
M Saiful Islam ◽  
MA Islam
Keyword(s):  
Technical Efficiency ◽  
Proper Time ◽  
Stochastic Frontier ◽  
Crop Management ◽  
Rice Production ◽  
Production Model ◽  
Rice Farmers ◽  
Prilled Urea ◽  
Production Environments ◽  
Yield Gain

A socio-economic study was carried out in two rice production environments (Gazipur and Tangail) to assess the comparative advantages of using urea super granule (USG) over prilled urea (PU) in modern rice production and to examine the differences in producers’ technical efficiency between USG user and non- user in crop management. Stochastic frontier production model was employed to examine the farm specific technical efficiency difference in crop management between USG and PU users in the study areas. Analysis revealed that comparatively low amount (36%) of urea was needed in modern boro rice production using USG instead of PU. Nearly 366 % more labour was needed in the USG using plots compared to that of PU user plots, while weeding cost was a bit lower in USG using plots. Analysis also indicated that the sample farmers were able to achieve additional yield of 0.87 t/ha by using USG and this yield gain further resulted to additional benefit of Tk. 11506/ha. For the resource poor rice farms, this benefit is considered to be substantive. Farmers’ contact with the technology disseminators, training on rice production and the use of USG (instead of PU) were the important factors of increasing rice farmers’ technical efficiency in crop management and productivity enhancement as well. According to the farmers’ opinion, there were several constraints in using USG and out of those, requirement of more labour and non availability of USG in proper time were the dominant ones. Keywords: Urea super granule; prilled urea; flood-prone ecosystem; technical efficiency; productivity. DOI: http://dx.doi.org/10.3329/bjar.v36i1.9237 BJAR 2011; 36(1): 129-141

scholarly journals Economic analysis of turmeric cultivation: evidence from Khagrachari district

2019 ◽  
Vol 44 (1) ◽  
pp. 43-58
Author(s):  
MEA Begum ◽  
MA Monayem Miah ◽  
MA Rashid ◽  
MT Islam ◽  
MI Hossain
Keyword(s):  
Higher Education ◽  
Technical Efficiency ◽  
Stochastic Frontier ◽  
Production Model ◽  
Extension Service ◽  
Good Source ◽  
Extension Services ◽  
Potential Output ◽  
Positive Effects ◽  
Net Benefits

Turmeric is a good source of income for hilly people of Bangladesh. The study estimated the profitability and technical efficiency of turmeric cultivation in Khagrachhari district. In total 150 turmeric farms located in Khagrachari Sadar, Panchari and Matiranga Upazilas of Khagrachari district, were surveyed. Data were collected, using a pre-tested questionnaire during January, 2015. The study revealed that turmeric farming is a profitable farming with some dominating variable costs like seed (rhizome) and sowing, harvesting and carrying. As the net return was Tk. 112139 per hectare and the BCR of sampled farmers was 2.20, this indicates that turmeric farms with a BCR greater than 1 have greater benefits than costs as well as positive net benefits. Seed (rhizome) and fertilizer showed significant positive effects on the turmeric production in the stochastic frontier production model. Turmeric farming displayed a mean technical efficiency of 82%, which suggested a substantial 18% of potential output of turmeric can be recovered by removing inefficiency. Besides improving technical efficiency, potential also exists for raising turmeric production through higher education and extension services. For a land scarce country like Bangladesh this gain could help increase income and ensure better livelihood for the hilly farmers. The policy implication of the analysis is that investment in education and extension service would greatly improve technical efficiency that contribute to income of the hilly people. Bangladesh J. Agril. Res. 44(1): 43-58, March 2019

scholarly journals An Estimation of Technical Efficiency of Poultry Farming in Nepal

2019 ◽  
pp. 88-111
Author(s):  
Nripesh Bahadur Pradhan ◽  
Nirmal Kumar Raut
Keyword(s):  
Technical Efficiency ◽  
Error Term ◽  
High Efficiency ◽  
Stochastic Frontier ◽  
Production Model ◽  
Likelihood Estimator ◽  
Homogenous Distribution ◽  
Efficient Level ◽  
Commercial Poultry ◽  
Poultry Farming

 The commercial poultry is growing rapidly in Nepal which requires that efficient level of output that ensures high levels of productivity and profit is produced. The objective of this study is to estimate the technical efficiency of the poultry farming in Nepal and its distribution spatially across the districts. The study utilizes Cobb-Douglas production function to define the structure of the production model and its error term is assumed to follow exponential distribution. Thereafter, using maximum likelihood estimator, parametric approach to Stochastic Frontier Method is applied to the data obtained from Nepal Commercial Poultry Survey 2015. The study finds technical efficiency of 92 percent suggesting high efficiency. Assuming half-normal distribution in the error term, however, yields technical efficiency of 89 percent. Further disaggregation of technical efficiency by districts shows its homogenous distribution across the districts covered in the study. The study, hence, suggests the possibility to increase its production to the level of potential output by improving technical efficiency. One of the various ways to improve technical efficiency is by ensuring high quality inputs both physical and technical to the poultry farms.

scholarly journals Eficiencia técnica de pesquerías con heterogeneidad inobservada

2019 ◽  
Vol 37 (3) ◽  
pp. 101
Author(s):  
David Castilla Espino ◽  
Juan José García del Hoyo
Keyword(s):  
Technical Efficiency ◽  
Latent Class ◽  
Stochastic Frontier Analysis ◽  
Unobserved Heterogeneity ◽  
Stochastic Frontier ◽  
Production Model ◽  
Stochastic Frontier Model ◽  
Production Frontier ◽  
Frontier Analysis ◽  
Production Activity

Fisheries production is subject to a significant variability caused no only by the stochastic nature of fisheries due to uncontrolled environmental and biological conditions, but also by factors related to production activity. It is necessary to take into consideration all these factors to avoid biases on production model estimates. This paper aims to go through this variability in Stochastic Frontier Analysis to account for observed and unobserved heterogeneity together with technical efficiency and randomness. This paper exemplifies the application of a Latent Class Stochastic Frontier model to the anchovy fishery of Southeastern Black Sea to account for production frontier heterogeneity. Results show a mean level of technical efficiency of 55%, which is higher than those produced by the standard stochastic frontier model. Moreover, results allow identifying two latent classes in the fleet. They also provide sound scientific advice for de management of the fishery.

Economic analysis of cassava production in Ogbia Local Government Area, Bayelsa State

2021 ◽  
Vol 1 (2) ◽  
pp. 001-008
Author(s):  
NC Morgan ◽  
DA Wasini ◽  
IE Larry
Keyword(s):  
Local Government ◽  
Technical Efficiency ◽  
Stochastic Frontier ◽  
Local Government Area ◽  
Production Model ◽  
Farm Size ◽  
Cost Ratio ◽  
Gross Margin ◽  
Benefit Cost Ratio ◽  
Cassava Production

The study was carried out to analyze “the Economics of cassava production in Ogbia Local Government Area of Bayelsa State, Nigeria”. The specific objectives of the study were to describe the socio-economic characteristics of cassava farmers; analyze costs and returns of producing cassava; determine technical efficiency; determine factors influencing technical efficiency of cassava farmers; and Identify constraints associated with cassava production in the study area. The sample of (94) cassava farmers was drawn from (10) communities in Ogbia and structured questionnaires were administered. Descriptive statistics, Translog Stochastic Frontier Production Model (SFPM) and budgetary model were used to analyze the data. Female (87.23%) dominated cassava production. 74% falls within the age of 21-50 years. Majority were married (65%) and 54.26% had a family size of 6-10. 52.13% of the respondents were basically farmers and all of them get there source of income for farming from personal savings and 72.34% used both family and hired labour in the production of cassava with 58.51% of them having farm size ≤0.5. The study further reveals that the gross margin was ₦521,313.50 and the profitability index was 64.07, while the rate of return on investment was 178.31, benefit-cost ratio of 2.8 proving the viability of cassava production in the study area. Lack of credit facilities, high spread of disease, lack of land were the major constraints faced by the farmers. Loans and grants should be made available to farmers either by government agencies or rather programs to fund cassava production should be created.

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