Total factor productivity growth in European stock exchanges: A non-parametric frontier approach

This paper examines progressive changes in productivity of the European stock exchange industry using non-parametric frontier techniques. Within the framework of Malmquist indices, total factor productivity growth is decomposed into technological progress and technical efficiency change for a balanced panel of all major European stock exchanges over the period 1993–1999. The principal findings indicate an overall rise in productivity over the sample period, which is driven more by technological innovation than by efficiency improvements. According to organisational setup, technological innovation is more pronounced for exchanges with the following characteristics: automation, equity and derivatives trading, for-profit governance structure, large or medium-size capitalised markets. Technological progress can be interpreted as a sign of the dynamic nature of the whole exchange industry, in which stock exchanges take advantage of intense diffusion of new cost-effective technologies and information systems to leverage themselves onto a higher production frontier.stock exchanges; productivity; technological progress; Europe

Productive efficiency and regulatory reform: The case of vehicle inspection services.

Measuring productive efficiency provides information on the likely effects of regulatory reform. We present a Data Envelopment Analysis (DEA) of a sample of 38 vehicle inspection units under a concession regime, between the years 2000 and 2004. The differences in efficiency scores show the potential technical efficiency benefit of introducing some form of incentive regulation or of progressing towards liberalization. We also compute scale efficiency scores, showing that only units in territories with very low population density operate at a sub-optimal scale. Among those that operate at an optimal scale, there are significant differences in size; the largest ones operate in territories with the highest population density. This suggests that the introduction of new units in the most densely populated territories (a likely effect of some form of liberalization) would not be detrimental in terms of scale efficiency. We also find that inspection units belonging to a large, diversified firm show higher technical efficiency, reflecting economies of scale or scope at the firm level. Finally, we show that between 2002 and 2004, a period of high regulatory uncertainty in the sample’s region, technical change was almost zero. Regulatory reform should take due account of scale and diversification effects, while at the same time avoiding regulatory uncertainty.Productive Efficiency, Regulatory Reform, Vehicle Inspections.

Deregulation, Entry of Foreign Banks and Bank Efficiency in Australia

This study considers the efficiency of banking in Australia during the post-deregulation period 1988-2001. Since 1986 restrictions upon foreign bank entry and foreign ownership have been affectively abolished. Using Data Envelopment Analysis (DEA) and Malmquist Indices, we find that the new foreign banks are more (input) efficient than domestic banks, mainly due to their superior scale efficiency. However, this superior efficiency did not necessarily result in superior profits. Our results are consistent with the limited global advantage hypothesis of Berger et al (2000). We argue that the major Australian banks have used size as a barrier to entry to the new entrants in the post-deregulation period. Furthermore, bank efficiency seems to have increased post-deregulation and the competition resulting from diversity in bank types was important to prompt improvements in efficiency. Finally, the recession of the early 1990s resulted in a distinct shift in the process of efficiency changes.foreign banks, deregulation, data envelopment analysis, Malmquist indices

Power industry restructuring and eco-efficiency changes:a new slacks-based model in Malmquist-Luenberger Index measurement

Measuring variations in efficiency and its extension, eco-efficiency, during a restructuring period in different industries has always been a point of interest for regulators and policy makers. This paper assesses the impacts of restructuring of procurement in the Iranian power industry on the performance of power plants. We introduce a new slacks-based model for Malmquist-Luenberger (ML) Index measurement and apply it to the power plants to calculate the efficiency, eco-efficiency, and technological changes over the 8-year period (2003-2010) of restructuring in the power industry. The results reveal that although the restructuring had different effects on the individual power plants, the overall growth in the eco-efficiency of the sector was mainly due to advances in pure technology. We also assess the correlation between efficiency and eco-efficiency of the power plants, which indicates a close relationship between these two steps, thus lending support to the incorporation of environmental factors in efficiency analysis

The origin and development of the technical efficiency analysis in the economy from an environmental viewpoint

Objective: Determine the technically efficient behavior for any agent in the economy, being responsible for its environmental performance. Methodology: Review of the state of the art of the literature on the analysis of technical efficiency from an environmental perspective. Results: Determine a behavior for an economy and ecological efficiency in order to assume a sustainable development. Limitations: Given the theoretical modelling developed, the main drawbacks are: the non-presence in the predictive models of the cost of the environmental impact, the lack of tools to collect adequately those impacts that are delayed in time and, finally, the limita- tions to investigate the influence of the uncontrollable natural factors. Practical implications: Action guides for individuals, firms and states to meet their needs with the least impact on the environment. Special attention to supply to decision-makers with an adequate study for the proper design of environmental regulations

Eco-efficiency considering the issue of heterogeneity among power plants

One of the main objectives in restructuring power industry is enhancing the efficiency of power facilities. However, power generation industry, which plays a key role in the power industry, has a noticeable share in emission amongst all other emission-generating sectors. In this study, we have developed some new Data Envelopment Analysis models to find efficient power plants based on less fuel consumption, combusting less polluting fuel types, and incorporating emission factors in order to measure the ecological efficiency trend. We then applied these models to measuring eco-efficiency during an eight-year period of power industry restructuring in Iran. Results reveal that there has been a significant improvement in eco-efficiency, cost efficiency and allocative efficiency of the power plants during the restructuring period. It is also shown that despite the hydro power plants look eco-efficient; the combined cycle ones have been more allocative efficient than the other power generation technologies used in Iran

Multi-period productivity measurement under centralized management with an empirical illustration to German saving banks

In this paper, we revisit the structure of the centralized Malmquist indices which apply inter-temporal benchmark technologies coupled with a relaxed assumption that the technology remains unchanged between the start and the end of the analysis. From a theoretical point of view as well as with an empirical application to a panel of German savings banks over the time period 2006-2012, we discuss this premise as the technology – which is naturally under the influence of different external and internal conditions – can change over time. This may hence result in an inappropriate estimate of the benchmark technology, generate questionable sets of common-weights and lead accordingly to misleading results and managerial conclusions. In order to eliminate this pitfall, we propose a new centralized framework in which individual characteristics of the technology, represented by different contemporaneous technology sets over time, can be preserved and later traced in measuring productivity change. Details of our empirical results, determined by the proposed Malmquist index, reveal that the productivity of the group of German savings banks has always been increasing during the whole period analyzed. The positive rates of growth highlight the fact that this group had a stable financial system even when the financial crisis hit the international monetary and financial market. The best practice change component of the suggested Malmquist index also verifies the significant effect of change in the technology on the performance of these banks over time. Although the group of German savings banks reduced its fixed assets over time, our analysis of productivity change shows how successfully these banks could improve even in a highly customized and growing digital business environment. However, looking at the slowdown in the growth of productivity between 2011-2012, captured by our results, it seems advisable that they accelerate the adaptation of their business strategy, e.g. by investing more in high quality and diverse internet-based products and services to catch up with the rapid developments in information technologies

Strategy Tripod Perspective on the Determinants of Airline Efficiency in A Global Context: An Application of DEA and Tobit Analysis

The airline industry is vital to contemporary civilization since it is a key player in the globalization process: linking regions, fostering global commerce, promoting tourism and aiding economic and social progress. However, there has been little study on the link between the operational environment and airline efficiency. Investigating the amalgamation of institutions, organisations and strategic decisions is critical to understanding how airlines operate efficiently. This research aims to employ the strategy tripod perspective to investigate the efficiency of a global airline sample using a non-parametric linear programming method (data envelopment analysis [DEA]). Using a Tobit regression, the bootstrapped DEA efficiency change scores are further regressed to determine the drivers of efficiency. The strategy tripod is employed to assess the impact of institutions, industry and resources on airline efficiency. Institutions are measured by global indices of destination attractiveness; industry, including competition, jet fuel and business model; and finally, resources, such as the number of full-time employees, alliances, ownership and connectivity. The first part of the study uses panel data from 35 major airlines, collected from their annual reports for the period 2011 to 2018, and country attractiveness indices from global indicators. The second part of the research involves a qualitative data collection approach and semi-structured interviews with experts in the field to evaluate the impact of COVID-19 on the first part’s significant findings. The main findings reveal that airlines operate at a highly competitive level regardless of their competition intensity or origin. Furthermore, the unpredictability of the environment complicates airline operations. The efficiency drivers of an airline are partially determined by its type of business model, its degree of cooperation and how fuel cost is managed. Trade openness has a negative influence on airline efficiency. COVID-19 has toppled the airline industry, forcing airlines to reconsider their business model and continuously increase cooperation. Human resources, sustainability and alternative fuel sources are critical to airline survival. Finally, this study provides some evidence for the practicality of the strategy tripod and hints at the need for a broader approach in the study of international strategies

Econometric Analysis of Efficiency in Indian Cement Industry

This article tries to assess total factor productivity performance and efficiency growth pattern for cement industry in India for the period, 1979-80 to 2008-09. Malmquist Data Envelopment Analysis (DEA) has been adopted to estimate different performance measures viz. productivity growth, technological change, and technical efficiency change for the entire period. We have observed that there is an accelerating trend in productivity during post-reform period. Industry also experienced increase in technological progress along with stagnation in technical efficiency. It was found in this study that the increasing technical change along with non- responding technical efficiency change were the main ingredients responsible for accelerating productivity change in India's cement industry. Moreover, the results allow us to conclude that gross mark up and growth in output, foreign direct investment (FDI) variables have significant positive impact on total factor productivity growth but openness impacted negatively which is beyond our expectation. In this sector, there is an urgent need to improve both technical efficiency and technological progress. Key words: Cement, India, Industry, Total Factor Productivity, Malmquist Index, technical change, efficiency change