A comparison between stochastic DEA and fuzzy DEA approaches: revisiting efficiency in Angolan banks

2018 ◽  
Vol 52 (1) ◽  
pp. 285-303 ◽  
Author(s):  
P. Wanke ◽  
C.P. Barros ◽  
A. Emrouznejad
Keyword(s):  
Performance Analysis ◽  
Management Practices ◽  
Banking Industry ◽  
Vital Part ◽  
Stochastic Dea ◽  
Dea Models ◽  
Managerial Implications ◽  
Fuzzy Dea ◽  
Inputs And Outputs

Performance analysis has become a vital part of the management practices in the banking industry. There are numerous applications using DEA models to estimate efficiency in banking, and most of them assume that inputs and outputs are known with absolute precision. Here, we compare Stochastic-DEA and Fuzzy-DEA models to assess, respectively, how the underlying randomness and fuzziness impact efficiency levels. The proposed models have been demonstrated using an application in Angolan banks. Findings reveal that conclusions with respect to the ranking of DMUs may vary substantially depending upon the type of the model chosen, although efficiency scores are similar to some extent when compared within the ambits of Stochastic-DEA and Fuzzy-DEA models. Additionally, modeling choices on fuzziness, rather than on randomness, appears to be the most critical source for variations in efficiency rankings. Managerial implications for Angolan banks are also explored.

Randomizing Efficiency Scores in DEA Using Beta Distribution

2014 ◽  
Vol 1 (4) ◽  
pp. 1-15
Author(s):  
Parakramaweera Sunil Dharmapala
Keyword(s):  
Beta Distribution ◽  
Data Envelopment ◽  
Imprecise Data ◽  
Output Data ◽  
Uniform Sampling ◽  
The Past ◽  
Stochastic Dea ◽  
Dea Models ◽  
Assurance Regions ◽  
Fuzzy Dea

Data Envelopment Analysis (DEA) has come under criticism that it is capable of handling only the deterministic input/output data, and therefore, efficiency scores reported by DEA may not be realistic when the data contain random error. Several researchers in the past have addressed this issue by proposing Stochastic DEA models. Some others, citing imprecise data, have proposed Fuzzy DEA models. This paper proposes a method to randomize efficiency scores in DEA by treating each score as an ‘order statistic' that follows a Beta distribution, and it uses Thompson et al.'s (1996) DEA model appended with Assurance Regions (AR) randomized by our “uniform sampling”. In an application to a set of banks, the work demonstrates the randomization and derives some statistical results.

scholarly journals Efficiency analysis of dairy farms in the Northern Great Plain region using deterministic and stochastic DEA models

2012 ◽  
Vol 6 (5) ◽  
pp. 113-122
Author(s):  
Tímea Gál
Keyword(s):  
Animal Health ◽  
Dairy Farms ◽  
Great Plain ◽  
Northern Great Plain ◽  
Stochastic Dea ◽  
Plain Region ◽  
Health Products ◽  
Dea Models ◽  
Cattle Breeders ◽  
Inputs And Outputs

Running any dairy enterprise is a risky activity: the profitability of the enterprise is affected by the price fluctuation of feed and animal health products from inputs, as well as by the fluctuation of end-product prices. Under these circumstances, it is essential for the cattle breeders, in order to survive, to harness the reserves in management as effectively as possible. In this research the efficiency and risk of 32 sample dairy farms were analysed in the Northern Great Plain Region from the Farm Accountancy Data Network (FADN) by applying classical Data Envelopment Analysis (DEA) and stochastic DEA models. The choice of this method is justified by the fact that there was not such an available reliable database by which production functions could have been defined, and DEA makes possible to manage simultaneously some inputs and outputs, i.e. complex decision problems. By using DEA, the sources that cause shortfall on inefficient farms can be identified, analysed and quantified, so corporate decision support can be reinforced successfully. A disadvantage of the classical DEA model is that the stochastic factors of farming cannot be treated either on the side of inputs or outputs; therefore, their results can be adopted with reservations, especially in agricultural models. This may have been because we could not discover that many agricultural applications. Considering the price of inputs and outputs as probability variables, 5000 simulation runs have been done in this research. As a result, it can be stated that at which intervals of the input and output factors can become competitive and the fluctuation of these factors can cause what level of risk at each farm.

Earnings management and equity incentives: evidence from the European banking industry

2019 ◽  
Vol 27 (2) ◽  
pp. 244-261 ◽  
Author(s):  
Mohammad Alhadab ◽  
Bassam Al-Own
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Banking Industry ◽  
Future Research ◽  
Loan Loss ◽  
Content Type ◽  
Loan Loss Provisions ◽  
Equity Incentives ◽  
European Banking ◽  
European Banks

Purpose This study aims to examine the effect of equity incentives on earnings management that occurs via the use of loan loss provisions by using a sample of 204 bank-year observations over the period 2006-2011. Design/methodology/approach The authors use the data of 39 European banks to test the main hypothesis. Several valuation models and regressions are used to measure the main proxies for executives’ compensation and the determinant factors of loan loss provisions. Findings The empirical results reveal that earnings management that occurs via discretionary loan loss provisions is associated with equity incentives in the banking industry. In particular, European banks’ executives with high equity incentives are found to manage reported earnings upwards by reducing loan loss provisions. The results therefore show that income-increasing earnings management via discretionary loan loss provisions is widely practised by the executives of European banks and that this is partly motivated by executives’ compensation. Practical implications The findings of this paper present important implications for regulators in the European Union, who should take further steps to reform the regulatory environment to monitor and mitigate the earnings management practices that occur via the manipulation of loan loss provisions. Earnings management practices do not just negatively affect subsequent performance but are also found to lead to firms’ failure. Thus, regulators should take the necessary reforms to protect the wealth of stakeholders (investors, creditors, etc.). Originality/value This study provides the first evidence on the relationship between equity incentives and earnings management in the European banking industry. The study sheds more light on an issue of great interest to a broad audience that does not receive much attention in the prior research, thus opening new avenues for future research.

scholarly journals A Decision Support Model for Measuring Technological Progress and Productivity Growth: The Case of Commercial Banks in Vietnam

Axioms ◽  
2021 ◽  
Vol 10 (3) ◽  
pp. 131
Author(s):  
Chia-Nan Wang ◽  
Ngoc-Ai-Thy Nguyen ◽  
Thanh-Tuan Dang ◽  
Thi-Thuy-Quynh Trinh
Keyword(s):  
Productivity Growth ◽  
Commercial Banks ◽  
Banking System ◽  
Bank Performance ◽  
Net Income ◽  
Decision Support Model ◽  
Bottom Line ◽  
Window Analysis ◽  
Dea Models ◽  
Managerial Implications

The interactive relationship between the banking system and enterprise makes up the role that affects a national economy. Significantly, the relationship between banking and technology has become tighter over the past few decades. An assessment of bank performance is critical for understanding their position and provides valuable information to practitioners. In this paper, we assess the performance of the top 18 commercial banks in Vietnam during 2015–2019. The assessment utilizes two data envelopment analysis (DEA) models while involving the banks’ performance in six dimensions, including assets, deposits, operating expenses, liabilities as inputs, while treating loans and net income as outputs. Using the Malmquist measurement, the total productivity growth indexes of the banks are obtained, which are decomposed into technical and technological evolutions. Window analysis is used to compute the efficiencies of the banks in every single year in 2015–2019. From the results of Malmquist, most banks are found to decrease their Malmquist productivity indexes from 2015 to 2019, wherein both of their technical and technological indexes declined. Window analysis indicates B6-SHBank, B1-Vietinbank, and B18-PetrolimexGroup as the most efficient banks during 2015–2019, and in the interim, B16-BaoVietBank, B11-NationalCitizen, and B13-VietnamMaritime ranked on the bottom line. The managerial implications of this research help to reflect the comprehensive insights of the top Vietnamese commercial bank performance and offer a strategic guideline for decision-makers toward sustainable development in the banking industry.

scholarly journals National Culture for a Participatory Time-driven Activity Based Costing: A Conceptual Framework and Research Agenda

2018 ◽  
Vol 9 (2) ◽  
pp. 56
Author(s):  
Attilio Mucelli ◽  
Francesca Spigarelli ◽  
Dominique Lepore
Keyword(s):  
Conceptual Framework ◽  
National Culture ◽  
Research Agenda ◽  
Management Practices ◽  
Activity Based Costing ◽  
Futures Research ◽  
Managerial Implications ◽  
Decision Making Processes ◽  
Costing System ◽  
Potential Moderator

National culture has a well-recognized role in management practices especially in shaping participatory decision-making processes (PDM). The article aims to provide a conceptual framework where national culture is considered as a potential moderator in a PDM when designing a Time-Driven Activity Based Costing (TDABC). The purpose is to identify a set of dimensions when designing time equations, on which the costing system is based on, to be then linked to national culture. Moreover, a research agenda is also presented in order to validate the proposed framework, outlining directions for futures research as well as managerial implications.

scholarly journals MANAGEMENT PRACTICES AND COST SYSTEM DESIGN: EVIDENCE FROM JORDANIAN MANUFACTURING COMPANIES

2020 ◽  
Vol 8 (1) ◽  
pp. 920-929
Author(s):  
Majdy I. Zuriekat
Keyword(s):  
System Design ◽  
Management Practices ◽  
Systems Design ◽  
Just In Time ◽  
Manufacturing Companies ◽  
Total Quality ◽  
Cost System ◽  
Study Results ◽  
Managerial Implications ◽  
Study Questionnaire

Purpose: The purpose of this study is to reveal and examine the nature of costing systems design alongside the usage of new manufacturing practices in Jordanian Manufacturing Companies. Design/Methodology/Approach: For carrying out the study, 86 managers from 43 manufacturing companies received the study questionnaire from which 56 were valid for data analysis. The study results are presented using multiple regression analysis. Findings: The results using multiple regressions indicate that Just in Time (JIT), Total Quality Management (TQM) and Product Diversity (PD) has a significant influence on costing systems design. Implications: This study provides evidence on the importance of using management practices as a driver for companies to use a broader perspective for designing costing systems. Responding managers have now empirical evidence regarding the manufacturing practices needed to design costing systems to their companies. Originality/Value: This is the first attempt to examine the manufacturing practices as a driver for cost system design. The study also provides significant managerial implications on how to use manufacturing practices to ensure better cost system design.

Factors Affecting the Hazardous Waste Management Practices in Heavy Industries

2021 ◽  
Vol 12 (4) ◽  
pp. 108-118
Author(s):  
Kennedy Degaulle Gunawardana ◽  
Chamari K. Jayasinghe ◽  
A. D. Nuwan Gunarathne
Keyword(s):  
Sri Lanka ◽  
Waste Management ◽  
Hazardous Waste ◽  
Management Practices ◽  
Factors Affecting ◽  
Hazardous Waste Management ◽  
Company Policy ◽  
Managerial Implications ◽  
Waste Management Practices ◽  
Industry Sectors

Among the different types of waste, hazardous waste poses a serious challenge to humans and the environment if not properly managed. Although many industries generate hazardous waste in various degrees, heavy industries generate the largest volume of hazardous waste. While hazardous waste management (HWM) has been studied well in many industry sectors and countries, it is not so with heavy industries in developing countries. The purpose of this paper was therefore to identify the factors affecting the HWM practices in heavy industries in Sri Lanka. The data was collected from 40 companies in ten different industrial categories of heavy industry. The respondent was the environmental officer of each company. The analysis reveals that technological facilities, public resistance, company policy, and economic factors affect the HWM practices in heavy industries in Sri Lanka. This study has several policy level and managerial implications for HWM in heavy industries to contribute towards the achievement of sustainable development.

scholarly journals Comparing crisis management practices in the hotel industry between initial and pandemic stages of COVID-19

2020 ◽  
Vol 32 (10) ◽  
pp. 3135-3156 ◽  
Author(s):  
Ivan Ka Wai Lai ◽  
Jose Weng Chou Wong
Keyword(s):  
Performance Analysis ◽  
Human Resources ◽  
Crisis Management ◽  
Management Practices ◽  
Management Strategies ◽  
Hotel Industry ◽  
Content Type ◽  
Initial Stage ◽  
Travel Restrictions ◽  
Hotel Managers

Purpose Given the increasing number of travel restrictions, the COVID-19 outbreak has dealt a crippling blow to the hotel industry, and the crisis management practices supporting the industry needs are changing as the pandemic continues. This study aims to compare how the hotel industry has responded to this crisis at the initial stage and the pandemic stage. Design/methodology/approach Data were collected from hotel managers in Macau in two occasions, namely, early February and early April 2020. Importance-usage-performance analysis was conducted to classify six categories of practices (pricing, marketing, maintenance, human resources, government assistance and epidemic prevention) into four executable crisis management strategies (priority, maintain, low priority and possible overkill) for each stage. Follow-up in-person interviews were conducted to validate the results of the study. Findings In the initial stage, priority strategies should be applied in all epidemic prevention, pricing and maintenance practices and in two governmental assistance and human resources practices. In the pandemic stage, all epidemic prevention practices remain at the priority quadrant, but two pricing practices are downgraded. Hotels tended to force labour into unpaid vacations (furlough) and postpone office and system maintenance. Governmental assistance should be at a low priority. Originality/value This study contributes to the knowledge of contingency planning for crisis management across crisis periods. It also demonstrates the processes of importance-usage-performance analysis for researchers to undertake further studies in tourism crisis management. Timely recommendations for governments and hotel industry stakeholders are provided to cope with this crisis.

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