Returns to Scale, Productivity and Competition: Empirical Evidence from U.S. Manufacturing and Construction Establishments

2016 ◽  
Author(s):  
Wei Gao ◽  
Matthias Kehrig
Keyword(s):  
Empirical Evidence ◽  
Returns To Scale

scholarly journals Risk-adjusted efficiency and bank size in a developing economy: an analysis of Vietnamese banks

2020 ◽  
Vol 47 (2) ◽  
pp. 386-404 ◽  
Author(s):  
Minh Le ◽  
Viet-Ngu Hoang ◽  
Clevo Wilson ◽  
Thanh Ngo
Keyword(s):  
Credit Risk ◽  
Empirical Evidence ◽  
Developing Economies ◽  
Returns To Scale ◽  
Banking System ◽  
Developed Countries ◽  
Content Type ◽  
Empirical Results ◽  
Increased Risk ◽  
Small Banks

PurposeThere is ample empirical evidence to show that larger banks are more efficient than smaller banks in developed countries. However, there is very little empirical evidence to show that in small developing economies, such as Vietnam, bank size is associated with increased risk, especially credit risk. This paper aim to provide empirical evidence to fill in this gap. This paper employs a slack-based directional distance function using the intermediation approach in measuring the inefficiency of banks in Vietnam during the period 2006–2015. Non-performing loans are used as an undesirable output to capture credit risk. The results show that small banks are more efficient than large banks at the mean level and across the entire distributions of inefficiency of the two groups. Input waste, output shortage and risk surplus of big banks are nearly three times higher than those of small banks. The results are robust under constant and variable returns to scale for production technologies. The study’s empirical results contribute to the ongoing debate on the merits of enlarging bank size in a small transitional economy and suggest that policy makers should pay attention to the risk and inefficiency of large banks to enhance the performance of Vietnam's banking system as a whole.Design/methodology/approachThis paper uses the non-radial slack-based directional technology distance function developed by Färe and Grosskopf (2010) to estimate the efficiency of banks using the data envelopment analysis technique. Data for 44 commercial banks are used.FindingsThe empirical results of the paper contribute to the ongoing debate on the merits of enlarging bank size in a small transitional economy and suggest that policy makers should pay attention to the risk and inefficiency of large banks to improve the performance of Vietnam's banking system as a whole.Originality/valueThis paper extends the extant literature by examining whether efficiency is associated with size in a typical transitional developing economy. The classic Cournot model, the structure-conduct-performance and the efficiency structure hypotheses state that larger banks are more efficient than smaller banks (Bikker and Bos, 2008). Empirical studies of Berger (2003), Mester (2005), Wheelock and Wilson (2012) lend support to the statement in developed countries. However, not much empirical literature focuses on small developing economies such as Vietnam to show that bank size is associated with increased risk, especially credit risk. The study’s empirical results show that size enlargement is not positively associated with risk-adjusted efficiency. Input waste, output shortage and risk surplus of big banks are nearly three times higher than those of small banks. The results are robust under constant and variable returns to scale for production technologies.

scholarly journals IS THERE EMPIRICAL EVIDENCE FOR DECREASING RETURNS TO SCALE IN A HEALTH CAPITAL MODEL?

2012 ◽  
Vol 21 (9) ◽  
pp. 1080-1100 ◽  
Author(s):  
Titus J. Galama ◽  
Patrick Hullegie ◽  
Erik Meijer ◽  
Sarah Outcault
Keyword(s):  
Empirical Evidence ◽  
Returns To Scale ◽  
Health Capital

scholarly journals Empirical Evidence for Decreasing Returns to Scale in a Health Capital Model

2012 ◽  
Author(s):  
Titus J. Galama ◽  
Patrick Hullegie ◽  
Erik Meijer ◽  
Sarah M. Outcault
Keyword(s):  
Empirical Evidence ◽  
Returns To Scale ◽  
Health Capital

scholarly journals Do Mutual Funds Have Decreasing Returns to Scale? Evidence from Fund Mergers

2018 ◽  
Vol 54 (4) ◽  
pp. 1683-1711 ◽  
Author(s):  
Ping McLemore
Keyword(s):  
Theoretical Model ◽  
Empirical Evidence ◽  
Mutual Funds ◽  
Returns To Scale ◽  
Negative Relationship ◽  
And Performance ◽  
Fund Mergers ◽  
Positive Shock ◽  
Fund Size

Using mergers as shocks to fund size, I analyze the return-to-scale property of mutual funds. I find that acquiring funds’ performance deteriorates after experiencing a positive shock in size resulting from mergers, and liquidity plays an important role in the negative relationship between size and performance. I also find that the decline in performance is not due to higher performance prior to the merger, nor driven by higher integration costs after the event. These findings are consistent with mutual funds having decreasing returns to scale and thus provide empirical evidence that supports the theoretical model of Berk and Green (2004).

scholarly journals Empirical Evidence Of Verdoorns Law In Mexican Manufacturing

2013 ◽  
Vol 12 (2) ◽  
pp. 205
Author(s):  
Lourdes Alicia Gonzalez Torres ◽  
Manuel Alejandro Ibarra Cisneros ◽  
Juan Manuel Ocegueda Hernandez ◽  
Karla Emilia Cervantes Collado
Keyword(s):  
Empirical Evidence ◽  
Manufacturing Industry ◽  
Returns To Scale ◽  
Least Square Method ◽  
Least Square ◽  
Increasing Returns ◽  
Pool Data ◽  
Positive Relation ◽  
Ordinary Least Square ◽  
Regional Policies

In this document we use the model called Verdoorns Law that has been widely favored with the empirical evidence as being able to explain the persistence of divergences in growth rates, which establishes a positive relation between product growth and productivity. The goal is to estimate the Verdoorns coefficients for the 32 states in Mexico for the period of 1985-2004 through the use of the Ordinary Least Square method (OLS) and the pool data technique for an added analysis at subsector levels of the manufacturing industry. The purpose of this paper is to explain regional divergences in Mexico by identifying those factors that influence economic growth and that would allow the proposal of regional policies that can help reduce the observed differences, and by contributing to the development of the country as a whole. Consistent results were found with Verdoorns Law by detecting increasing returns in the manufacturing industry, both by regions and by subsectors. The states that show lower Verdoons coefficients (higher returns to scale) are definitely the ones that have grown the most.

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