Yardstick Competition and Spatial Interdependence of Cost Efficiency in Local Governments: Development and Application of an Interpretable Spatial Inefficiency Stochastic Frontier Model

2021 ◽  
Author(s):  
Takahiro Tsukamoto ◽  
Izuru Maeda
Keyword(s):  
Cost Efficiency ◽  
Local Governments ◽  
Stochastic Frontier ◽  
Stochastic Frontier Model ◽  
Yardstick Competition ◽  
Spatial Interdependence

Efficiency in Cooperative Banks and Savings Banks

2019 ◽  
pp. 49-69
Keyword(s):  
Gross Domestic Product ◽  
Empirical Evidence ◽  
Cost Efficiency ◽  
Stochastic Frontier ◽  
Gdp Growth ◽  
Stochastic Frontier Model ◽  
Empirical Results ◽  
Savings Banks ◽  
Cooperative Banks ◽  
The Cost

This chapter provides additional empirical evidence on the efficiency in cooperative banks and savings banks by applying a stochastic frontier model to estimate the cost efficiency from nine countries over the period 2005 to 2011. The empirical results suggested that a higher rate of the gross domestic product (GDP) growth implies an increase in the inefficiency level, while smaller cooperative and savings banks are more efficient in managing costs compared to larger banks.

Cost efficiency and its determinants in the hotel industry

2016 ◽  
Vol 23 (5) ◽  
pp. 1056-1068 ◽  
Author(s):  
Antonio Arbelo ◽  
Pilar Pérez-Gómez ◽  
Marta Arbelo-Pérez
Keyword(s):  
Human Resources ◽  
Cost Efficiency ◽  
Labour Productivity ◽  
Stochastic Frontier ◽  
Hotel Industry ◽  
Stochastic Frontier Model ◽  
Hotel Management ◽  
Competitive Strategies ◽  
Strategic Resources ◽  
Time Invariant

This study employs a stochastic frontier model to estimate cost efficiency and its determinants in the hotel industry in Spain between 2008 and 2012. Measuring cost efficiency provides useful information on the performance of hotels to management, shareholders and, in general, to all stakeholders. Cost control is an issue managers are particularly concerned about, as it gives a competitive advantage that allows hotels to perform better. The results indicate that the inefficiency in average costs for the sample considered is 32.44% and is time invariant. The results also show that labour productivity, the accumulation of knowledge and location are factors that largely determine the differences in efficiency between hotels. These findings have important implications for public policymakers and hotel management, specifically, policies aimed at improving the skills of hotels’ human resources should be encouraged. Likewise, both location and the accumulation of knowledge are strategic resources that hotel management must include in their competitive strategies to increase efficiency.

scholarly journals A Simultaneous Stochastic Frontier Model with Dependent Error Components and Dependent Composite Errors: An Application to Chinese Banking Industry

Mathematics ◽  
2020 ◽  
Vol 8 (2) ◽  
pp. 238 ◽  
Author(s):  
Jianxu Liu ◽  
Mengjiao Wang ◽  
Ji Ma ◽  
Sanzidur Rahman ◽  
Songsak Sriboonchitta
Keyword(s):  
Cost Efficiency ◽  
Banking Industry ◽  
Random Noise ◽  
Stochastic Frontier ◽  
Single Equation ◽  
Stochastic Frontier Model ◽  
Copula Functions ◽  
Chinese Banks ◽  
Chinese Banking Industry ◽  
High Level

The paper develops a simultaneous equations stochastic frontier model (SFM) with dependent random noise and inefficiency components of individual equations as well as allowing dependence across all equations of the model using copula functions. First, feasibility of our developed model was verified via two simulation studies. Then the model was applied to assess cost efficiency and market power of the banking industry of China using a panel data of 37 banks covering the period 2013–2018. Results confirmed that our simultaneous SFM with dependent random noise and inefficiency components outperformed its predecessor, which is a simultaneous SFM with dependent composite errors but with independent random noise and inefficiency components of individual SFMs as well as the conventional single-equation SFM. Apart from the statistical and computational superiority of our developed model, we also see that Chinese banks in general have a high level of cost efficiency and that competition in the banking industry of China mainly exists in state-owned banks and joint stock banks. Presence of economies of scales as well as diseconomies of scales were found in different banks. Also, the state-owned banks embraced most sophisticated technologies thereby allowing them to operate with the highest level of cost efficiency.

Cost performance of Italian football clubs: analysing the role of marketing and sponsorship

2014 ◽  
Vol 15 (4) ◽  
pp. 59-77 ◽  
Author(s):  
Carlos Pestana Barros ◽  
Vincenzo Scafarto ◽  
António Samagaio
Keyword(s):  
Cost Efficiency ◽  
Explanatory Variable ◽  
Stochastic Frontier ◽  
Policy Implications ◽  
Stochastic Frontier Model ◽  
Cost Performance ◽  
Frontier Estimation ◽  
Football Clubs ◽  
The Cost

This paper analyses the cost efficiency of Italian football clubs using a stochastic frontier model. The frontier estimation confirmed that the model fits the data well with all coefficients correctly signed and in line with the theoretical requirements. Marketing and Sponsorship is taken into account as an explanatory variable and the factors which contributed to these findings, as well as other policy implications, are provided.

scholarly journals Estimation of technical efficiency of black cumin (Nigella sativa L.) farming in northwest Ethiopia: a stochastic frontier approach

2020 ◽  
Vol 9 (1) ◽  
Author(s):  
Abebe Birara Dessie ◽  
Tadie Mirie Abate ◽  
Betelhem Tsedalu Adane ◽  
Tiru Tesfa ◽  
Shegaw Getu
Keyword(s):  
Technical Efficiency ◽  
Nigella Sativa ◽  
Stochastic Frontier ◽  
Market Price ◽  
Northwest Ethiopia ◽  
Flowering Plant ◽  
Yield Potential ◽  
Stochastic Frontier Model ◽  
Black Cumin ◽  
The Mean

Abstract Ethiopia is one of the east African countries which produce and exports various spices to other countries. Black cumin (Nigella sativa L.) is an important stiff annual flowering plant which mainly grows by producers for its seeds. An increasing demand of black cumin seed and oil in local, national and international market for medicinal, consumption and commercial purpose makes the best alternative crop for small holder farmers in Ethiopia. In spite of its importance, not much has been done to improve its production and productivity in Ethiopia. Therefore, this research was designed to examining efficiency variations and factors influencing technical inefficiency levels of producers on black cumin production in northwest Ethiopia. Primary data were collected using a semi-structured questionnaire administered on 188 black cumin producers selected using systematic random sampling technique. Moreover, various data analysis methods such as descriptive statistics and stochastic frontier model were used for analyzing the data. The empirical result obtained by applying maximum likelihood estimate of stochastic frontier model revealed that seed (p < 0.01) labor (p < 0.05), chemical (p < 0.01) and land (p < 0.05) were significant input variables in determining black cumin production. The mean technical efficiency level of black cumin producer was generally low, about 53.1%. The mean value of actual yield, potential yield and yield gap was 3.131, 5.832 and 2.701 quintals, respectively. Moreover, the result of stochastic frontier model together with the inefficiency parameters revealed that market price of black cumin (p < 0.01) and access of extension service (p < 0.1) were significant variables and positively influenced the efficiency levels of black cumin producers. Whereas age of producers (p < 0.05) and distance to farm plot (p < 0.01) negatively influenced the technical efficiency levels of black cumin producers. Therefore, the study recommends that adoption of latest agricultural technologies; development of institutions, agricultural extension services and infrastructure are advisable to improve the efficiency and commercial value of black cumin production.

scholarly journals How Earmarking Government Revenue Affects Efficiency of Road Construction and Maintenance

2021 ◽  
Vol 49 (1) ◽  
pp. 136-163
Author(s):  
Ramon Christen ◽  
Nils C. Soguel
Keyword(s):  
Public Choice ◽  
Public Administration ◽  
Stochastic Frontier ◽  
Road Construction ◽  
Transport Infrastructure ◽  
Government Revenue ◽  
Stochastic Frontier Model ◽  
Public Resources ◽  
Negative Effect ◽  
Per Capita

It is common practice to assign revenue to accomplish specific governmental tasks in general and to provide transport infrastructure in particular. However, neither the literature in public administration nor in public choice has reached a consensus about the effects that earmarking has on efficiency. Building on earlier public choice models, we argue that this mechanism prevents budget debates from occurring and reduces the incentives for ministers to monitor the colleagues whose budgets are financed by earmarked revenues. These latter tend to overuse public resources, thus increasing inefficiency. A stochastic frontier model fed with data from Swiss cantonal ministries of transport from 2000 to 2016 tests this hypothesis. The results reveal a negative effect of earmarking on efficiency. For every 1,000 additional Swiss francs per capita financed out of an earmarked fund, the input requirement increases by 5.4 percent on average.

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