The use of Cobb-Douglas and translog in estimating profit efficiency: the case of Tanzania

2014 ◽  
Author(s):  
Dickson Pastory ◽  
Xuezhi Qin
Keyword(s):  
Profit Efficiency

Revisiting earnings quality and bank efficiency among East African developing economies: do systemic banking and financial crises matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
David Mutua Mathuva ◽  
Moses Nyangu Nzuki
Keyword(s):  
Earnings Management ◽  
Developing Economies ◽  
Earnings Quality ◽  
Bank Loan ◽  
East African ◽  
Loan Loss ◽  
Profit Efficiency ◽  
Regional Economic ◽  
Content Type ◽  
Economic Bloc

PurposeIn this paper, the authors investigate whether the systemic local banking crises (LBCs) and global financial crisis (GFC) impact the association between bank profit efficiency and earnings quality in developing economies.Design/methodology/approachUsing panel data spanning 29 years over the period 1991–2019 for 169 banks drawn from five East African countries, the authors perform difference-in-difference multivariate analyses using the generalised method of moments (GMM) system estimator on a sample consisting of 2,261 bank-year observations.FindingsThe results, which are robust for endogeneity and other checks, show that banks with higher profit efficiency consistently report higher quality earnings. The authors further establish that whereas systemic LBCs contribute negatively to bank earnings quality, the GFC tends to have a positive impact. These results are upheld when the joint impacts of both systemic LBCs, GFC and profit efficiency on earnings quality are considered. The positive influence of profit efficiency and GFC on earnings quality is pronounced under income-decreasing earnings management. The impacts of profit efficiency, LBCs and GFC on earnings quality appear to be non-monotonic and vary across the sampled countries.Research limitations/implicationsThe study's findings are based on banks in five developing countries within a regional economic bloc. Additional studies could focus on other economic blocs for enhanced generalisability of the findings. In addition, some of the variables examined are studied at bank-level, while other variables are at country-level. Finally, the study establishes an association between the variables of interest, and this does not necessarily imply causation.Practical implicationsThe results provide useful insights to bank regulatory and supervisory agencies on the need to exercise increased risk-based scrutiny over bank loan loss provisioning and minimum loan loss reserve requirements. From an audit perspective, auditors need to be cautious and apply an enhanced risk-based audit especially when auditing banks during and after a financial, banking or systemic crisis. Credit rating agencies need to pay closer attention to the LLPs of distressed banks. Finally, bank investors and customers should be cautious when using bank financial statements, since bank managers of poorly performing banks might engage in aggressive earnings management.Originality/valueThe study is perhaps the first to examine the joint effects of systemic LBCs on the association between bank profit efficiency and the quality of earnings in a larger dataset of banks in a developing regional economic bloc. The authors also employ the GMM system estimator in the modelling, which helps address some weaknesses in prior studies.

Cost and Profit Efficiencies in the Spanish Hotel Industry

2015 ◽  
Vol 41 (8) ◽  
pp. 985-1006 ◽  
Author(s):  
Antonio Arbelo ◽  
Pilar Pérez-Gómez ◽  
Enrique González-Dávila ◽  
Felipe Manuel Rosa-González
Keyword(s):  
Competitive Advantage ◽  
Special Interest ◽  
Cost Efficiency ◽  
Hotel Industry ◽  
Profit Efficiency ◽  
Distribution Free ◽  
Working Hypothesis ◽  
Distribution Free Approach ◽  
Hotel Sector

This article focuses on estimating and discussing cost and profit efficiencies related with the Spanish hotel sector. Managers have a special interest in controlling costs as a source of competitive advantage, which may enable companies to improve their results in a continuous manner. However, they usually do not attribute much importance to the improvement of profit efficiency, which is generally much lower than cost efficiency and as a result vital for achieving competitive advantage. In this article, cost and profit efficiencies are estimated in the Spanish hotel sector using a data panel for the years 2007 to 2011 and using distribution free approach methodology. The results show profit efficiency levels significantly lower than levels of cost efficiency, thereby confirming our working hypothesis.

scholarly journals Analysis of Profit Efficiency of Sesame Production in Yobe State, Nigeria: A Stochastic Translog Profit Function Approach

2020 ◽  
pp. 58-70
Author(s):  
S. E. Jonah ◽  
B. G. Shettima ◽  
A. S. S. Umar ◽  
E. Timothy
Keyword(s):  
Percent Level ◽  
Sampling Procedure ◽  
Farm Income ◽  
Profit Function ◽  
Market Information ◽  
Profit Efficiency ◽  
Extension Services ◽  
Essential Information ◽  
Education Access ◽  
The Cost

Aims: Sesame productions are constantly bedeviled with menace because of inadequate supply of quality seed, extension services, credit facilities, presence of inefficiencies among others. The capacity of sesame producers to accept new innovation and achieve sustained production relies upon the level of profit efficiency, generally dictated by variable input and output prices including the cost of fixed factors of production. Physical profitability contemplations such technical, allocative and economic efficiency are significant in improving production proficiency but profit efficiency will result to higher profit to sesame farmers. This paper examined the profit efficiency of sesame production in Yobe State, Nigeria. Research Methods: Multistage sampling procedure is utilized to choose the farmers. A structured questionnaire is administered to 180 respondents spread across 12 Local Government Areas to acquired essential information. Descriptive statistics used includes mean, frequency and percentage. The inferential statistic used is stochastic translog profit function. Findings: The result of levels of profit efficiency shows the mean profit efficiency of 0.8828. The result of the translog profit function indicates the sigma square to be 0.249 and variance of 0.909. All the cost variables has negative coefficients and significant at one percent level except for cost of farmlands. The inefficiency variables levels of education, Access to Extension Services, Access to credits among others reduce inefficiency while off-farm income and access to market information increase inefficiency. Conclusion: It can be concluded that inefficiency exist in the utilization of resources. All the input cost variable decreases profit efficiency and all the socioeconomic characteristics decreases profit inefficiency with the exception of, off-farm income and access to market information which were found to increase profit inefficiency.

Profit Efficiency Among Basmati Rice Producers in Pakistan Punjab

1989 ◽  
Vol 71 (2) ◽  
pp. 303-310 ◽  
Author(s):  
Mubarik Ali ◽  
John C. Flinn
Keyword(s):  
Basmati Rice ◽  
Profit Efficiency

Cost, revenue and profit efficiency analysis of Indian scheduled commercial banks

2017 ◽  
Vol 59 (3) ◽  
pp. 442-462 ◽  
Author(s):  
Megha Mahendru ◽  
Aparna Bhatia
Keyword(s):  
Public Sector ◽  
Commercial Banks ◽  
Empirical Work ◽  
Specific Reference ◽  
Profit Efficiency ◽  
Content Type ◽  
Output Synchronization ◽  
Efficiency Performance ◽  
Private And Public ◽  
The Cost

Purpose This paper aims to analyze the cost, revenue and profit efficiency performance of Indian scheduled commercial banks. The study also determines differences if any related to efficiency among banks on the basis of ownership pattern. Design/methodology/approach Cost, revenue and profit efficiency of banks is calculated by using the non-parametric approach, namely, data envelopment analysis. Further, the differences in the efficiency scores are examined by applying analysis of variance. Findings Indian scheduled commercial banks have not been able to maintain their input-output synchronization in terms of cost, revenue and profits in the year 2012-2013. Foreign sector banks have higher cost and profit efficiency as compared to their counterparts in private and public sector, whereas public sector banks are found to have been more revenue efficient. Originality/value With specific reference to India, less empirical work has been carried out with respect to cost, revenue and profit efficiency. None of the studies have evaluated the sector-wise performance of banks in terms of all three efficiency parameters.

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