nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2016‒11‒27
25 papers chosen by

  1. Slack-based directional distance function in the presence of bad outputs: Theory and Application to Vietnamese Banking By Manh D. Pham; Valentin Zelenyuk
  2. Matching frontiers: A random parameter model approach By Baños, José F.; Rodríguez-Álvarez, Ana; Suárez, Patricia
  3. Efficiency evaluation of Spanish hotel chains By Wiper, Michael P.; Veiga, Helena; Deng, Yaguo
  5. Pakistan's productivity performance and TFP trends 1980-2015: Cause for real concern By Amjad, Rashid; Awais, Namra
  6. The rapid expansion of herbicide use in smallholder agriculture in Ethiopia: Patterns, drivers, and implications By Tamru, Seneshaw; Minten, Bart; Alemu, Dawit; Bachewe, Fantu Nisrane
  7. The Determinants of TFP Growth in the Portuguese Manufacturing Sector By Daniel Gonçalves; Ana Martins
  8. Management Practices and Productivity in Germany By Broszeit, Sandra; Fritsch, Ursula; Görg, Holger; Laible, Marie-Christine
  9. Is there a prison size dilemma? An empirical analysis of output-specific economies of scale By Veerle Hennebel; Richard Simper; Marijn Verschelde
  10. Weather, climate and total factor productivity By Marco Letta; Richard S.J. Tol
  11. Capital Allocation across Regions, Sectors and Firms: evidence from a commodity boom in Brazil By Paula Bustos; Gabriel Garber; Jacopo Ponticelli
  12. What is the effect of Inflation on Manufacturing Sector Productivity in Ghana? By Bans-Akutey, Mawufemor; Yaw Deh, Isaac; Mohammed, Faisal
  13. Taxation, Sorting and Redistribution: Theory and Evidence By Arash Nekoei; Ali Shourideh; Mikhail Golosov
  14. The duality of Shephard’s weakly disposable technology By Hervé Leleu; Albane Tarnaud
  15. Measuring network proximity of regions in R&D networks By Iris Wanzenböck
  16. Estimating Potential Output in Chile; A Multivariate Filter for Mining and Non-Mining Sectors By Patrick Blagrave; Marika Santoro
  17. The Impact of Management Quality on Innovation Performance of Firms in Emerging Countries By Oleg Sidorkin
  18. Total Factor Productivity and Social Cooperation: Theoretical Framework and Tentative Empirical Analysis By Ilya Lokshin; Anastasia Samorodova; Evgenia Skoptsova
  19. Taxation, infrastructure, and firm performance in developing countries By Lisa Chauvet; Marin Ferry
  20. The origin of CEOs and its influence on microfinance performance and risk-taking By Daudi Pascal; Leif Atle Beisland; Roy Mersland
  21. Tuition Fees and Student Effort at University By P. Beneito; J.E. BoscaÌ; J. Ferri
  22. The Effect of Debt Policy on Firms Performance: Empirical Evidence from Listed Manufacturing Companies on The Ghana Stock Exchange By Prempeh, Kwadwo Boateng; Nsiah Asare, Evelyn; sekyere, Allan McBright
  24. A New Input-Oriented Plant Capacity Notion: Definition and Empirical Comparison By Giovanni Cesaroni; Kristiaan Kerstens; Ignace Van de Woestyne
  25. Efficiency in Spatially Disaggregated Labour Market Matching By Elzbieta Antczak; Ewa Galecka-Burdziak; Robert Pater

  1. By: Manh D. Pham (School of Economics, The University of Queensland); Valentin Zelenyuk (Centre for Efficiency and Productivity Analysis, The University of Queensland)
    Abstract: In this paper we extend the slack-based directional distance function introduced by F ̈are and Grosskopf (2010) to measure efficiency in the presence of bad outputs and illustrate it through an application on data of Vietnamese commercial banks. We also compare results from the slack-based directional distance function relative to the directional distance function, the enhanced hyperbolic efficiency measure (F ̈are et al., 1989) and the Farrell-type technical efficiency and confirm that it has greater discriminative power.
    Keywords: Banking, Bad outputs, Data Envelopment Analysis, Directional distance function, Slack-based efficiency, Performance analysis
    JEL: C14 C15 C44 D24 G21
    Date: 2016–11
  2. By: Baños, José F.; Rodríguez-Álvarez, Ana; Suárez, Patricia
    Abstract: This paper models the efficiency of labour offices belonging to the Public Employment services (PESs) in Spain using a stochastic matching frontier approach. With this aim in mind, we apply the random parameter model approach (Greene, 2005) in order to control for observed and unobserved heterogeneity. Results indicate that when we analyse the goodness of fit of the estimates we found that it improves by controlling both, observed and unobserved heterogeneity in the inefficiency term. Also, results suggest that counsellors improve the productivity of labour offices and that, the share of unemployed skilled persons, unemployed persons aged 44 or younger, as well as the share of unemployed persons in the construction sector, all affect the technical efficiency of PESs offices.
    Date: 2016
  3. By: Wiper, Michael P.; Veiga, Helena; Deng, Yaguo
    Abstract: The tourism industry and in particular the hotel sector, is a highly competitive market. In this context, it is important that an hotel chain operates efficiently if it wants to maintain its market position. The objective of this work is to compare the relative efficiency of some of the largest hotel chains operating in Spain. To do this, we have designed a stochastic frontier model to measure revenue efficiency as a function of various different inputs such as total staff or number of rooms. Given that some chains are much bigger than others, both inputs and outputs are normalized by a measure of size. In contrast to previous works, we account for heterogeneity in hotel chains by introducing relevant inputs, such as the proportion of hotels in the chain with three stars or fewer, into the efficiency term of the stochastic frontier model. Our results suggest that in the Spanish case, in the period of the economic crisis, it was better in terms of revenue efficiency, for hotel chains to invest in hotels of three or fewer stars than in higher star rated hotels. Finally, we could find no clear evidence of a relationship between size and efficiency.
    Keywords: Stochastic frontier analysis; Revenue function; Heterogeneity; Efficiency; Bayesian inference
    Date: 2016–11
  4. By: Ayse Altiok-Yilmaz (Bahcesehir University); Elif Akben-Selcuk (Kadir Has University)
    Abstract: The impact of corporate performance on the likelihood of voluntary or disciplinary CEO turnover has been a central research topic in finance. To date, the majority of the studies in the area focused on developed countries and documented a negative relationship between the two variables. However, considering institution differences and different corporate governance mechanisms in emerging markets, the results could differ in other countries. The objective of the present study is to investigate the relationship between CEO turnover and financial performance in an emerging market, Turkey. The sample includes non-financial firms listed on Borsa Istanbul and the period of analysis covers the years 2005-2014. A firm-year is defined as a turnover year if there was a change in the name of the CEO as announced in the company news. The empirical results are consistent with prior literature and indicate that financial performance is negatively associated with the probability of CEO turnover. The effect size is stronger in the case of disciplinary turnovers and findings are robust to alternative performance measures. These results suggest that corporate governance mechanisms are not ineffective in Turkey.
    Keywords: CEO turnover, financial performance, Turkey.
  5. By: Amjad, Rashid; Awais, Namra
    Abstract: This paper reviews Pakistan’s productivity performance over the last 35 years (1980–2015) and identifies factors that help explain the declining trend in labor productivity and total factor productivity (TFP),both of which could have served as major drivers of productivity growth – as happened in East Asia and more recently in India. A key finding is that the maximum TFP gains and their contribution to economic growth are realized during periods of high-output growth. The lack of sustained growth and low and declining levels of investment appear to be the most important causes of the low contribution of TFP to productivity growth, which has now reached levels that should be of major concern to policymakers vis-à-vis Pakistan’s growth prospects. Using the endogenous growth model, we examine the contribution of physical capital, human capital and TFP to labor productivity. The results suggest that, over these35 years, the contribution of physical capital and education remains modest and there has been a declining trend in TFP growth. This shows that Pakistan’s economy has not taken full advantage of the favorable technological developments and rapid globalization of the period. We also question the view expressed in recent studies that Pakistan’s growth has been driven primarily by factor inputs, namely labor and capital, and not by TFP growth. The paper argues to the contrary that it is the lack of investment in and growth of the stock of capital embodying the most recent knowledge and technology that has inhibited TFP growth post-1990. Finally, there is an urgent need for further research to understand the dynamics of growth in services and to raise TFP in this sector as India has done post-1990.
    Keywords: Growth, labour, capital, labour productivity, total factor productivity, Pakistan.
    JEL: D24 E01 O47
    Date: 2016–09
  6. By: Tamru, Seneshaw; Minten, Bart; Alemu, Dawit; Bachewe, Fantu Nisrane
    Abstract: We use qualitative and quantitative information from a number of datasets to study the adoption patterns and labor productivity impacts of herbicide use in Ethiopia. We find a four-fold increase in the value of herbicides imported into Ethiopia over the last decade, primarily by the private-sector. Adoption of herbicides by smallholders has grown rapidly over this period, with the application of herbicides on cereals doubling to more than a quarter of the area under cereals between 2004 and 2014. Relying on unique data from a large-scale survey of producers of teff, the most widely grown cereal in Ethiopia, we find significant positive labor productivity effects of herbicide use of between 9 and 18 percent. We show that the adoption of herbicides is strongly related to proximity to urban centers, levels of local rural wages, and access to markets. All these factors have changed significantly over the last decade in Ethiopia, explaining the rapid take-off in herbicide adoption. The significant increase in herbicide use in Ethiopia has important implications for rural labor markets, potential environmental and health considerations, and capacity development for the design and effective implementation of regulatory policies on herbicides.
    Keywords: ETHIOPIA, EAST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, smallholders, productivity, farm inputs, herbicides, market access, labor market
    Date: 2016
  7. By: Daniel Gonçalves (Gabinete Estratégia e Estudos Ministério Economia / Office for Strategy and Studies - Ministério da Economia / Ministry of Economy); Ana Martins (Gabinete Estratégia e Estudos Ministério Economia / Office for Strategy and Studies - Ministério da Economia / Ministry of Economy)
    Abstract: Given the linkage between Total Factor Productivity growth and economic growth, it becomes relevant to understand, at the firm level, which are the main determinants of such growth path. We use an extensive panel data covering Portuguese manufacturing firms, between 2010 and 2014, in order to assess which are the main determinants of the Total Factor Productivity. Through a second stage estimation we present a fixed-effects model that captures different dimensions of firm level characteristics that impact TFP growth, suggesting policy recommendations amid the model’s results. Our results show that age and debt influence negatively TFP growth, whereas size, exports and training expenses prompt TFP growth.
    Keywords: Total Factor Productivity, LEVPET, Industry
    JEL: D22 D24
    Date: 2016–11
  8. By: Broszeit, Sandra (Institute for Employment Research (IAB), Nuremberg); Fritsch, Ursula (Kiel Institute for the World Economy); Görg, Holger (Kiel Institute for the World Economy); Laible, Marie-Christine (Institute for Employment Research (IAB), Nuremberg)
    Abstract: Based on a novel dataset, the "German Management and Organizational Practices" (GMOP) Survey, we calculate establishment specific management scores following Bloom and van Reenen as indicators of management quality. We find substantial heterogeneity in management practices across establishments in Germany, with small firms having lower scores than large firms on average. We show a robust positive and economically important association between the management score and establishment level productivity in Germany. This association increases with firm size. Comparison to a similar survey in the US indicates that the average management score is lower in Germany than in the US. Overall, our results point towards lower management quality being at least in part to blame for the differences in aggregate productivity between Germany and the US.
    Keywords: management practices, firm performance, labor productivity, GMOP, MOPS
    JEL: D24 L2 M2
    Date: 2016–11
  9. By: Veerle Hennebel (KU Leuven); Richard Simper (University of Nottingham); Marijn Verschelde (IÉSEG School of Management, LEM (UMR-CNRS 9221))
    Abstract: We advocate a nonparametric multi-output framework to estimate output-specific economies of scale and we apply this model to male prisons in England and Wales over the sample period 2009-2012. To estimate output-specific returns to scale in prisons, we consider not only the cost-per-place, but also qualitative outputs such as purposeful out-of-cell activity and successful reintegration. Furthermore, we introduce environmental heterogeneity using the characteristics of the prison(ers). England and Wales offers a unique example to study economies of scale in prisons as the UK has started to build new super-size prisons in order to replace the most outdated prisons.
    Keywords: data envelopment analysis, economies of scale, multi-output production, UK penology
    Date: 2016–10
  10. By: Marco Letta (Sapienza Università di Roma); Richard S.J. Tol (University of Sussex; Vrije Universiteit Amsterdam; Tinbergen Institute; CESifo)
    Abstract: Recently it has been hypothesized that climate change will affect total factor productivity growth. Given the importance of TFP for long-run economic growth, if true this would entail a substantial upward revision of current impact estimates. Using macro TFP data from a recently developed dataset in Penn World Tables, we test this hypothesis by directly examining the nature of the relationship between annual temperature shocks and TFP growth rates in the last decades. The results show a negative relationship only in poor countries. While statistically significant, the estimate upper bound is a reduction of TFP growth is less than 0.1%, i.e., climate change will decelerate but not reverse economic growth. This finding increases concerns over the distributional issues of future impacts, and restates the case for complementarity between climate policy and poverty reduction.
    Keywords: weather variability; climate change; total factor productivity; economic growth
    JEL: O44 O47 Q54
    Date: 2016–11
  11. By: Paula Bustos; Gabriel Garber; Jacopo Ponticelli
    Abstract: We study the allocation of capital across regions, sectors and firms. In particular, we assess to what extent growth in agricultural productivity can lead to an increase in the supply of credit in industry and services. For this purpose, we identify an exogenous increase in agricultural profits due to the adoption of genetically engineered soy in Brazil. We find that regions with larger increases in agricultural productivity experienced larger increases in local bank deposits. However, there was no increase in local bank lending. Instead, capital was reallocated towards other regions through bank branch networks. This increase in credit supply affected firms' credit access through the extensive and intensive margin. First, regions with more bank branches receiving funds from soy areas experienced an increase in credit market participation of small and medium sized firms. In addition, banks experiencing faster deposit growth in soy areas increased their lending to firms with whom they had preexisting relationships. In turn, these firms grew faster in terms of employment and wage bill. Our estimates imply that the elasticity of firm growth to credit is largest in the manufacturing sector. These findings suggest that agricultural productivity growth can lead to structural transformation through a financial channel.
    Date: 2016–11
  12. By: Bans-Akutey, Mawufemor; Yaw Deh, Isaac; Mohammed, Faisal
    Abstract: Using annual time series data for Ghana, the current study investigates the effect of inflation on manufacturing sector productivity for the period 1968-2013. The empirical verification is done by using the Johansen test (JT), the Vector Error Correction Model (VECM), and the Ordinary Least Squares (OLS) regression test. The results indicate significant stable long run relationship between inflation and manufacturing sector productivity. However, there is insignificant short run link between inflation and manufacturing sector productivity in the VECM. The results of the OLS test indicate negative significant link between inflation and manufacturing sector productivity. The findings suggest that inflation has led to a decrease in manufacturing sector productivity. Policy makers should manage inflation very well in order to improve manufacturing sector productivity. Future study should examine the current topic accounting for causality and structural breaks issues since the present study did not consider these issues.
    Keywords: Manufacturing sector productivity, Inflation, Long run, Short run
    JEL: E31 L60 P24
    Date: 2016–11–18
  13. By: Arash Nekoei (IIES-Stockholm); Ali Shourideh (University of Pennsylavnia); Mikhail Golosov (Princeton University)
    Abstract: We develop a framework for optimal taxation when assignment of workers to firms is endogenous. In our model, workers are heterogeneous with respect to their productivity as well as their firm-specific cost of working. Firms have heterogeneous productivities and production exhibits complementarities between firm and worker productivity. Different workers assign to different firms and this assignment depends on the the distribution of workers characteristics. We show that the nature of the multi-dimensional heterogeneity of the workers implies that income taxes affect the way workers sort into jobs. As a result, taxes affect the allocation of workers among firms and thus aggregate productivity even when traditional notions of labor supply are fully inelastic. Our model allows us to define a notion of sorting elasticity with respect to taxes and technological changes. Furthermore, we can analyze optimal linear and non-linear taxes and provide formulas that relate optimal taxes to the sorting elasticity. Contrary to some results in the literature, technological change that changes firms' distribution of productivity does have an effect on marginal taxes through this sorting elasticity. Finally, we provide evidence on the magnitude of the sorting elasticity and its implications on optimal income taxes using employer-employee data.
    Date: 2016
  14. By: Hervé Leleu (CNRS-LEM 9221 and IESEG School of Management); Albane Tarnaud (IESEG School of Management)
    Abstract: A part of the recent literature on the treatment of undesirable outputs by weakly disposable models advocates for the use of the Kuosmanen approach to weak disposability. It defines the minimum extrapolation technology satisfying the disposability assumptions specific to weakly disposable models under three different assumptions on convexity: convexity of the technology set, convexity of output sets only and no convexity at all. We contribute to this taxonomy by adding the case of assuming both input and output sets convex, restoring the classical Shephard approach to weak disposability on the output correspondence. After defining the technology through the definition of a directional distance function, we also linearize the corresponding program and show how the application of duality results in a clear, intuitive, and economically relevant interpretation of the assumption of weak disposability on outputs. Finally, we provide an original proof of the existing relationship between weak disposability and returns to scale.
    Keywords: Undesirable output; weak disposability; duality; convexity; data envelopment analysis
    Date: 2016–03
  15. By: Iris Wanzenböck
    Abstract: This paper proposes a new measure for assessing the network proximity between aggregated units, based on disaggregated information on the network distance of actors. Specific focus is on R&D network structures between regions. We introduce a weighted version of the proximity measure, related to the idea that direct and indirect linkages carry different types of knowledge. Here, first-order proximity arising from direct cross-regional linkages is to be distinguished from higher-order network proximity resulting from indirect linkages in the R&D network. We use an macroeconomic application where we analyse the productivity effects of R&D network spillovers across regions to illustrate the usefulness of a proximity measure specifically developed for aggregated units.
    Keywords: network proximity, aggregated networks, first-order proximity, higher-order proximity, R&D networks, knowledge spillovers
    Date: 2016–11
  16. By: Patrick Blagrave; Marika Santoro
    Abstract: Using a multivariate filter, we estimate potential growth rates in Chile’s mining and non-mining sectors. Estimates for the mining sector incorporate information on copper prices, whereas estimates for non-mining reflect information on inflation and unemployment rates. To better understand the drivers of potential growth, we decompose estimates into capital, labor (adjusted for human-capital and hours worked), and total-factor productivity using a production-function. Our estimates of potential output in Chile suggest that an important part of the recent growth slowdown has been structural, with potential-output growth slowing to 2½ percent in recent years, although it plausibly could be higher in the medium-term.
    Keywords: Potential output;Chile;Mining sector;Copper;Commodity prices;External shocks;Economic growth;Capital accumulation;Labor markets;Total factor productivity;Production functions;Econometric models;Macroeconomic Modeling, Potential Output, Production Function
    Date: 2016–10–14
  17. By: Oleg Sidorkin
    Abstract: I study the impact of management quality on innovation input and output of manufacturing firms in ten emerging countries using data from the Management, Organization and Innovation (MOI) Survey. I find effects of management quality on the decisions of firms to invest in R&D hold for both EU and non-EU emerging countries. An improvement in management quality from the 25th percentile to the median is associated with a 4.5 percentage point increase in the propensity to invest in R&D and a 5.7 percent increase in R&D spending per employee. Furthermore, there are positive but weak effects of management quality on product innovation. The empirical results for individual management practices show that the quality of monitoring management is intimately connected with innovation input and output. The quality of incentive management is related to higher input into innovation, but not to innovation output. The overall effects of operations and targeting management quality do not prove to be significant. All results hold after controlling for differences in management quality by industries. Additional analysis of management quality asymmetry shows that the results are driven mainly by firms with low quality management.
    Keywords: management quality; R&D; innovation; emerging countries;
    JEL: L2 M2 O3 P2
    Date: 2015–12
  18. By: Ilya Lokshin (National Research University Higher School of Economics); Anastasia Samorodova (National Research University Higher School of Economics); Evgenia Skoptsova (National Research University Higher School of Economics)
    Abstract: The paper develops the ideas centered around the proposition that high total factor productivity (TFP) is conducive to social cooperation by drawing the interests of economic and, in more general terms, social agents together. In the first part of the paper, a simple theoretical framework is presented that leads to a typology of social orders which is based upon the stimuli of social agents for cooperation and predation. In the second part, a tentative empirical analysis is conducted (panel-data regression with fixed effects) which provides a crude testimony for the plausibility of the theoretical claim that high TFP is associated with cooperation-fostering institutions. The third part of the paper elaborates on the results of empirical analysis and presents some further hypotheses which are concerned with two quite different subject-matters: on the one hand, with the role of TFP as a possible factor of social cooperation; on the other hand, with the typology of social orders proposed by North, Wallis and Weingast in their “Violence and Social Orders”. The latter theme is integrated in the discussion about TFP, cooperation and predation
    Keywords: Russian Federation, vocational education and training (VET), skill formation, coordinated and liberal market economies, collective dilemmas
    JEL: Z
    Date: 2016
  19. By: Lisa Chauvet; Marin Ferry
    Abstract: This paper investigates the relationship between taxation and firm performance in developing countries. Taking firm-level data from the World Bank Enterprise Surveys (WBES) and tax data from the Government Revenue Dataset (ICTD/UNU-WIDER), our results suggest that tax revenue benefits to firm growth in developing countries, especially in low-income countries and lower-middle income countries. These findings are robust to the inclusion of alternative covariates and specifications, and do not appear to be sample dependent. We also provide evidence that the positive effect of taxation on firm growth falls significantly when corruption is too pervasive, and when the origin of tax revenue origin reduces government accountability. Lastly, our paper finds that the positive effect of domestic revenue on firm performance could channel through the financing of public infrastructures vital to firms operating in lower-income countries. Keywords: taxation, firm growth, infrastructure, corruption
  20. By: Daudi Pascal; Leif Atle Beisland; Roy Mersland
    Abstract: This study examines the relationships between the origin of chief executive officers (CEOs), and the performance and risk-taking levels of their companies. It is based on a sample of 353 microfinance institutions (MFIs) from 76 countries, with data covering the period 1996-2011. We use return on assets and operational costs as performance metrics, and the standard deviation of return on assets and operational costs as measures of risk. The results suggest that MFIs with an internally-recruited CEO achieve a significantly higher performance than MFIs with an externally-recruited CEO. More specifically, MFIs with an ‘insider CEO’ have a positive association with return on assets, but a negative association with operational costs. Moreover, internally-recruited CEOs appear to be associated with a lower level of risk. We believe that these results are important and have clear policy implications, in particular for an industry with such a thin labour market for CEOs and lack of managerial capacity. Our findings are consistent with the view that insider CEOs have firm-specific skills, experience and network resources that result in an enhanced MFIs performance and low-risk.
    Keywords: CEO; microfinance; performance; risk
    JEL: G21 G32 M12
    Date: 2016–11–21
  21. By: P. Beneito; J.E. BoscaÌ; J. Ferri
    Abstract: This paper presents theoretical and empirical evidence that an increase in tuition fees may boost university students’ academic effort. We examine the tuition fee rise introduced in 2012 by Spanish universities, where students reg- ister and pay for their chosen modules and fees increase each time students retake a module until they pass it. Data refer to students of economics, busi- ness and medicine at the University of Valencia during 2010-2014. The fact that some students pay fees in full while others are exempt from payment provides an identifying source of variation that we exploit using a flexible difference-in-differences methodology.
    Date: 2016–11
  22. By: Prempeh, Kwadwo Boateng; Nsiah Asare, Evelyn; sekyere, Allan McBright
    Abstract: Adopting a Debt Policy is considered as a momentous decision that influences the firm's value. The purpose of this Study is to empirically investigate the effect of Debt Policy (Short-Term Debt, Long-Term Debt, and Total Debt) on firms’ performance. Annual data was collected from five (5) manufacturing companies listed on the Ghana Stock Exchange (GSE) between 2005 to 2015. The panel data regression model was used to test if there was a significant relationship between the debt ratios and the performance indicators. The financial performance indicators employed in this Study are Gross Margin Profit, Return on Assets (ROA), Tobin's Q Ratio, and Debt Ratios employed are (Short-Term Debt, Long- Term Debt and Total Debt). Firm size and growth opportunity are considered as control variables. The results revealed that listed manufacturing firms in Ghana use 14% equity capital and 86% debt capital to finance their operations. The debt structure is made up of 49% long-term debt and 37% short-term debt. It was also found that debt (Short- Term Debt, Long Term Debt and Total Debt) has a negative effect on firms’ performance. It is, therefore, recommended that listed manufacturing firms should increase the level of equity finance and exploit the advantages of leverage. The Ghanaian government should take concrete steps to develop the country's capital market to enable businesses access long-term capital necessary for the financial performance of the firm in the long run.
    Keywords: Firms’ Performance, Debt policy, gross margin profit, Return on Asset (ROA), Tobin’s Q Ratio, Ghana Stock Exchange
    JEL: G0 G00 G30
    Date: 2016–11–20
  23. By: Fran Galetić (Faculty of Economics and Business, University of Zagreb); Tomislav Herceg (Faculty of Economics and Business, University of Zagreb)
    Abstract: The retail sector is one of the most important sectors in Croatian economy. This paper analyzes the profitability of Croatian retail sector compared to other countries of the European Union. The aim of this paper is to show the position of Croatia as the youngest member state of the European Union in comparison with other member states of the European Union and especially compared to ten "new" member states of the European Union. The analysis will show in which areas Croatia is similar to the European Union, but it will also show that unlike most new member states, Croatia’s GDP growth was driven essentially by employment growth, with limited productivity gains.
    Keywords: Productivity, Profitability, Croatia, European Union, Retail
    JEL: E00 O00
  24. By: Giovanni Cesaroni (Department for local development, Prime Minister’s, Rome, Italy); Kristiaan Kerstens (CNRS-LEM and IESEG School of Management); Ignace Van de Woestyne (KU Leuven, Belgium)
    Abstract: Starting from the existing output-oriented plant capacity measure, this paper proposes a new inputoriented plant capacity measure. Furthermore, we empirically illustrate both input- and outputoriented utilisation. In particular, we thereby pay attention to the impact of convexity of the technology on both input- and output-oriented plant capacity measures.
    Keywords: efficiency; plant capacity utilisation, convexity
    Date: 2016–09
  25. By: Elzbieta Antczak; Ewa Galecka-Burdziak; Robert Pater
    Abstract: We analyse the efficiency in a labour market matching process. We understand efficiency as a share of the mean number of matches (conditional on given covariates) in the number of matches that would occur if search and matching was optimal, bearing in mind that, contrary to the production function, being unemployed or vacant is not freely chosen or changed. We apply a stochastic matching frontier for random, job queuing and stock-flow models. We use data for Poland, a country with a highly regionally diversified unemployment rate. We contribute to the literature by comparing different spatial aggregation levels – NUTS-1 to NUTS-4 in monthly and annual perspectives. We analyse whether and how the efficiency changes over time. We find spatial and temporal heterogeneity in the labour market. Thus, various policy measures should be designed to improve labour market matching efficiency at certain regional levels.
    Keywords: matching function; matching efficiency; spatial aggregation; stochastic frontier;
    JEL: C23 J64
    Date: 2016–11

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