The effect of FDI on eco-efficiency performance: evidence from the BRICs

This paper aims to examine the effect of FDI on eco-efficiency performance. To serve this purpose, a time-dependent conditional slack-based measure model and nonparametric regression and test techniques are applied to BRICs during 2008-2015. It is found that there is an almost U-shape relationship between FDI and countries’ eco-efficiency performance among three countries of BRICs

Financial development and productive inefficiency: A robust conditional directional distance function approach

This paper examines whether the level of financial development helps lower countries’ inefficiency using time-dependent robust conditional directional distance functions in a sample of 91 countries over 1970–2011. The overall results reveal that the effect of financial development on countries’ productive inefficiency is highly nonlinear, and depends on countries’ income levels, suggesting that higher levels of financial development are enhancing more countries’ catching-up ability rather than their technological change

Measuring the value of product characteristics in the presence of price dispersion

Modeling the price of multi-attribute products generally requires an assessment of each attributes’ market value. In the presence of price dispersion, when similar products are sold at different prices, hedonic pricing models provide users with biased estimates of attribute value. This paper develops the hedonic pricing literature by proposing data envelopment analysis as a prior means of identifying a sub-sample of products which, after adjusting for attribute provision, display no price dispersion. These products then display a homogenous link between attributes and price, which can be modeled using hedonic pricing. This paper implements and evaluates this two-stage approach using 1000 observations from the UK mortgage market

Bank efficiency and financial centres: Does geographical location matter?

This paper examines the relationship between bank performance and geographical location with respect to the two major global financial centres, New York and London. It provides new insights on the spatial effects of the 2008–2009 Global Financial Crisis (GFC) on the technical efficiency of the top-1000, world-leading banks in terms of total assets. The results reveal that the distance of banks’ headquarters to these financial centres matters. In particular, banks that are located at a bigger distance from New York and London present a lower technical efficiency than banks that are closer to these financial centres. In addition, the results show that the Global Financial Crisis has magnified the effect of distance and the need for banks to be closer to global financial centres during the ‘core’ of that period

The impact of R&D investments on performance of firms in different degrees of proximity to the technological frontier

This study analyzes the impact of R&D in the performance of companies from different degrees of proximity to the technological frontier. In this way, a model of endogenous growth was built, where firms operating closer to this frontier use the research resources to move it, enjoying a higher return. To test this hypothesis, we used a sample of companies with major investments in R&D in the world, according the ‘EU Industrial R&D Investment Scoreboard'. Then, an indicator that measures the degree of proximity to the frontier for each sector was built. Through the technique of regression with panel data, it was estimated an equation where the performance metrics of the company is conditioned by investments in R&D and the investment interacted with the proximity index to the frontiers. Thus, the impact of investments in performance is represented by two important vectors of influence: (1) the average effect of investments on performance, represented as a direction of the sector in demand for investment; (2) the effectefficiency that determines the company's strategy as its position in relation to the established frontier. The results show that, as the firms get closer the technological frontier, the greater is the return of investment in R&D on performance. These results indicate that the advancement of economies towards the frontier or the best technological practices depends on policies that incorporate the influence of the 'development stage' in the outcome of this policy

The spillover effects of foreign direct investment on the productivity and efficiency in Indonesian manufacturing industry

The study aims to examine foreign direct investment spillover effects on the firms’ productivity performances and to examine the most important component of total factor productivity growth in explaining output growth. This study employs a time-varying stochastic frontier approach for firm level panel data of Indonesian manufacturing industry and performs a non-parametric test of the closeness of two distributions. The results demonstrate that foreign firms achieve higher productivity but less efficient than domestic firms. Increasing degrees of foreign ownership is negatively related to firms’ productivity but positively related to firms’ efficiency. There are positive horizontal spillover effects of foreign direct investment on the firms’ productivity and efficiency. The backward spillovers have positive impact on firm’s efficiency, and the forward spillovers have positive impact on firm’s productivity. However, there are negative backward spillover effects on firms’ productivity and negative forward spillover effects on firms’ efficiency. Besides that, within the same market technology spillover from FDI are smaller with higher level of labour quality. In the upstream market, the degree of absorptive capacity of suppliers has a negative impact on firms’ productivity but have a positive impact on reducing inefficiency. In the downstream markets, the greater ability of the buyers to identify, assimilate and exploit knowledge spillovers, the greater the impact on increasing productivity but the lesser the impact on reducing inefficiency. Finally, this study finds that all components of productivity; technological progress, technical efficiency change and scale efficiency change significantly contribute in explaining the TFP growth

A Research Note on Multinationality and Firm Performance: Nonparametric Frontier Analysis

This study provides a fresh insight into the examination of the comparison between multinationality and firm performance, measured through technical efficiency levels by overcoming methodological constraints and misunderstandings presented in earlier research. We estimate firms’ efficiency levels in a production function-type framework through technical efficiency levels using nonparametric data envelopment analysis (DEA). We include firms from both developed and developing economies, from different national origins and with different sectoral characteristics, with a particular focus on knowledge-intensive business services (KIBS) and capital-intensive business services (CIBS). The study confirms for the case of KIBS the existence of the three-stage sigmoid (S-shaped) hypothesis between multinationality and firm performance measured through technical efficiency levels. Finally, the empirical findings reveal that CIBS exhibit only the first two stages, thus forming a ‘U’-shape relationship. We propose the application of different firms’ performance measurements, providing us with the ability to unpack a firms’ managerial decision processes with regards to determining the optimised investment(s) in technology and research and development and with a particular focus on knowledge-intensive business services (KIBS) and capital-intensive business services (CIBS)

Modeling the effect of competition using robust conditional nonparametric frontiers: Evidence from U.S. manufacturing sector

The study applies the probabilistic framework of nonparametric frontier estimation in order to model the effect of competitive conditions on sectors’ production efficiency levels. We utilize conditional Order-m robust frontiers modeling the dynamic effects of competitive conditions on a sample of 462 U.S. 6-digit manufacturing sectors over the period 1958-2009. The results derived from the time-dependent robust conditional estimators unveil a non-linear relationship between market competition and productive efficiency. Our findings suggest that for higher competitive conditions the effect is positive up to a certain threshold point after which the effect becomes negative

How does Internationalisation affect the productivity of R&D activities in large innovative firms? A conditional nonparametric investigation

This work explores the relationship between multinational R&D and innovation productivity among top corporate knowledge and R&D producers by adopting a twofold concept of internationalisation: (1) the firm’s degree of R&D internationalisation, and (2) the firm’s geographic diversification. We model the patent production process with an appropriate and robust conditional Data Envelopment Analysis (DEA) estimator, using a unique database of firms that matches financial indicators and patent information. Our results reinforce the fundamental role of internationalisation in the knowledge production process when the internationalisation process is properly and strategically managed. We interpret our empirical evidence through the theoretical lens of the learning theory of internationalisation, and we postulate that a high R&D intensity is a key driver to overcoming the challenges of internationalisation