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The purpose of this paper is to analyze the relationship between farm size and agricultural production efficiency from the aspects of output and profit in order to find an optimal farm size that achieves both output and profit efficiency in agricultural production in China.

This study uses the 2012 China Family Panel Studies survey data and employs the stochastic frontier analysis (SFA) models to investigate empirically the relationship between farm size and agricultural production efficiency.

The study finds that there is an inverted-U curve relationship between farm size and output efficiency and a U-shaped curve relationship between farm size and profit efficiency in agricultural production in China. Based on the empirical results, the study estimates that the appropriate farm size is around 10–40 mu and the optimal farm size is around 20–40 mu both in terms of output efficiency and profit efficiency in Chinese agricultural production under the current agricultural technology and land management system.

The findings of this study suggest that appropriate land consolidation will bring more benefits to farmer households and agricultural production efficiency. There are some policy implications. First, governments should give long term and more stable land using rights to farmers through extending the period of land contract and verifying land using rights. Second, governments should encourage transfers of land using rights and promote land consolidation. But the implementation of this policy should consider regional differences and not be used for blindly pursuing increasing land size. Third, land consolidation should be accompanied with the development of specialized agricultural services.

The paper makes two major contributions to the literature. First, the authors use the SFA model to investigate the relationship between land size and agricultural production efficiency. Second, the authors establish two SFA models – the stochastic frontier output analysis model and the stochastic frontier profit analysis model – to estimate the optimal land size to achieve both output and profit efficiency of agricultural production in China.

The purpose of this paper is to analyze and compare the profit efficiency of custom and self-farming methods of rice production in Taiwan.

This study examines the nature and extent of the profitability and profit efficiency of custom and self-farming based on a farm survey in Taiwan. Furthermore, it estimates the stochastic profit frontier to measure the degree of inefficiency and analyze the determinants of these inefficiencies.

The profitability and profit efficiency of custom farming are lower than for self-farming, and the differences in profitability are more significant for large rice farmers. The estimation results show that the custom farming area and the farmer’s age decrease efficiency and, regardless of the farming style used, larger farms have higher profit efficiency.

This study’s findings show that self-farming is more favorable than custom farming for profit efficiency. This study examined this problem by conducting a regression adjustment for explanatory variables, but did not remove all self-selection bias, which may occur between profit efficiency and the choice of farming system.

Previous studies that measured the efficiency of rice farming often considered cost efficiency by the cost function, and ignored the increased profit from producing high-quality rice. This study used a one-step estimation of the profit frontier function to measure the degree of inefficiency and analyze the determinants of this inefficiency.

The purpose of this paper is is to identify the main determinants of insurance profitability on life and non-life segments to obtain which variables affect in each market of the Ecuadorian insurance sector.

The authors use a large panel data set with financial information from 2001 to 2017 and estimate the determinants through a panel corrected standard errors regression.

The authors found that net premiums, technical reserves, capital ratio and score efficiency are micro-determinants in the life insurance sector, whereas in the non-life sector, the micro-determinants include also claim level and liquidity ratio; moreover, the authors found that HHI is a determinant of profitability only in the life insurance. Among the macro determinants set, the authors found that the interest rate has also a significant impact both in the life and non-life insurance.

The authors analyze a dollarized emerging country, which is the first time in this kind of studies. The authors also include the structure-conduct-performance and relative market power paradigm as well as the ES hypothesis, calculated through the data envelopment analysis, as determinants of insurance profitability. Finally, this is the first research to examine the determinants of profitability in Latin American and Caribbean insurers.

Prior research has used computer-generated data to illustrate the benefits of the recently developed duration-based costing (DBC) and its affiliate modified duration-based costing (MDBC). The purpose of this paper is to use data from a Fortune 500 corporation to compare its traditional, or functional-based, cost allocation method with that of the recently developed DBC and MDBC models.

A Fortune 500 company provided one month of production data for a particular, key machine within its manufacturing process. The data were used to apply DBC and MDBC.

Variations arising from differences in the models’ cost allocation reveal the advantages of using time-based cost allocation over the traditional, mostly non-time-based allocation to estimate profit.

By using actual data, this case study enhances prior theoretical research concerning the benefits of utilizing DBC and MDBC over the traditional costing method.

This case study is of benefit to practitioners who use traditional costing since it will encourage them to explore DBC and/or MDBC that tend to be more accurate in situations where the old adage of “time is money” applies. Implementing DBC and MDBC was not difficult to do for the Fortune 500 company as all of the components to run the models were readily available.

This is the first study to utilize actual company data to illustrate DBC and MDBC, and thus, adding to the literature concerning DBC and MDBC.

This paper aims to analyze the process of producing a reported profit number to understand how different actors overcome the tensions arising from the often conflicting value frames that apply in different situations during this process and how the actors can benefit from the ensuing friction.

The tensions found in the profit production process are theorized in terms of dissonance (Stark, 2009), emphasizing how multiple voices, drawing on different value frames, contribute to the search for a profit number. The authors study this by means of a case study of a large listed company in the construction industry, where, because of how judgment pervades the profit production process, the search for profit is particularly exposed.

The authors find three important value frames – caution, control and compliance – which managers, accountants and auditors draw on in the profit production process, depending on the situation they find themselves in. With this finding, the authors contribute to the previous research on financial reporting and management work and the production of profits by demonstrating how the relationships between the involved actors – primarily the auditor–client relationship – can be characterized by principled and constructive rivalry in which competing value frames can coexist alongside each other and how the dissonance created in these situations can produce generative and productive friction.

Previous research has mostly focused on profit measurement, taking the existence of a “true” profit number for granted. The auditor–client negotiation literature typically suggests that actors endeavor to solve situations in a zero-sum game where different value frames are present. This paper, drawing on an incipient theoretical approach to accounting research which emphasizes multivocality and perspective, contributes to the nascent research on financial accounting and management work in general and the profit production process in particular. With empirical illustrations of the dissonance found in this process, this paper suggests that tensions resulting from dissonance (Stark, 2009) may be a resource in situations like the profit production process.

The purpose of this paper is to evaluate and compare the efficiency ratios and the technological gaps of banking industries in seven countries of the Middle East and North Africa (MENA) region.

The meta-frontier model was used to evaluate efficiency across countries that may have different production technologies.

The results of the meta-frontier analysis of banking systems over the period from 1991 to 2011 showed that Tunisian banks were the most efficient in terms of cost and profit. For the cost (profit) model, the analysis of the technological gap showed that Egyptian (Tunisian) banks used the most advanced technology in offering financial services to clients. The comparison of efficiencies confirmed that most efficient banks in terms of cost are not necessarily the most efficient in terms of profit and vice versa. The authors also concluded that cost efficiency analysis provides a partial view of banking efficiency and hence, profit efficiency analysis is as important.

The study is relevant for policymakers, regulators and monetary authorities and for researchers to know more about the real differences of efficiency of banks across countries in MENA region and to clarify the sources of this inefficiency to better adapt to the new environment, to make strategic decisions and to reference the performance of banking institutions.

With the ongoing transformation of the microfinance sector, questions have been raised on the ability of microfinance institutions (MFIs) to perform financially well without compromising with their social objectives. The current study attempts to analyse the social and financial performance of Indian MFIs with an objective to find the kind of relationship between these two objectives.

The dynamic framework of simultaneous equations model is used to find the nature of the relationship which exists between social and financial performance of Indian MFIs.

The study finds that depth of outreach enables MFIs to achieve financial sustainability. On the other hand, financially strong MFI lend more as reflected by an increase in their average loan size.

Many MFIs still receive subsidies to support their operations. Ideally, adjustments should be made to remove the effect of such subsidies on their cost. However, due to non-availability of data, the study fails to make any adjustment for the subsidies.

The presence of a complementary relationship between social and financial performance in the Indian microfinance sector is quite encouraging for the policymakers during the current time when the sector is becoming less dependent on subsidies. However, the recent upsurge in the average loan size requires attention.

The findings suggest that MFIs can achieve financial sustainability while targeting poor clients. This indicates that MFIs can perform socially good along with their financial performance.

Such study is vital when the Indian microfinance sector is moving away from subsidies to become self-reliant and commercialised. Few studies have focused on this aspect of Indian microfinance sector.

The purpose of this paper is to explore how various performance related pay (PRP) schemes influence employee turnover. It also tests whether profit sharing has a differential impact on turnover in comparison to other forms of PRP.

Utilizing a nationally representative longitudinal dataset of individuals, analysis begins with a parsimonious specification of the determinants of turnover and then progressively adds various sets of controls known to influence turnover decisions to observe how their inclusion influences PRP coefficients. Estimations employ both standard probits and panel data models.

Empirical evidence reveals a negative relationship between an aggregate measure of PRP and turnover. Disaggregating performance pay measures by type reveals a robust negative relationship between profit sharing and turnover. Although one would expect the influence of other PRP schemes to mimic that of profit sharing, evidence suggests otherwise.

Data lack information on how much earnings are based on PRP. Consequently, estimates may be biased when combining those who receive little earnings from PRP with those who receive substantial amounts of PRP into a single PRP measure.

Although PRP schemes are often introduced to improve incentives and productivity, profit sharing based on firm profitability may allow labor costs to vary with firm profits hence enhancing retention and reducing the incidence of unemployment during recession.

This paper adds to the literature and fulfils an identified need to study how other types of PRP besides profit sharing influence turnover.

This purpose of this paper to examine how profit sharing depends on the underlying profitability of firms. More precisely, motivated by theoretical research on fair wages and unionized labor markets, profit sharing is estimated for six different profitability categories: positive, increasing, positive and increasing, negative, decreasing and negative or decreasing.

The paper exploits a high-quality linked employer–employee data set covering the universe of Finnish workers and firms. Endogeneity of profitability and self-selection of firms in different profitability categories are accounted for by an instrumental variables approach. The panel-structure of the data is used to control for unobserved heterogeneity (spell and individual fixed effects).

Profits are shared if firms are profitable or become more profitable. The wage-profit elasticity varies between 0.03 and 0.13 in such firms. However, profits are not shared if firms make losses or become less profitable. There is no downward wage adjustment.

Because of the instrumental variables approach the question of external validity arises. Further empirical research on profit sharing with an explicit focus on firm profitability is warranted. The results of the paper indicate a connection between rent sharing and wage rigidity, as suggested by union and fair wage theory.

This is the first paper to consistently estimate the extent of profit sharing depending on the underlying profitability of firms.

The purpose of this paper is to examine the empirical effect of competition on cost and profit efficiency in the South African non-life insurance market in a three-stage analysis.

Using annual firm level data on 80 non-life insurance companies from 2007 to 2012, the authors first employ the stochastic frontier analysis (SFA) to estimate cost and profit efficiency scores. In the second stage, the authors measure insurance market competition using the Panzar-Rosse (P-R) H-statistics. In the final stage, the authors estimate a fixed-effects panel regression model which controls for heteroskedasticity to examine the effect of competition on the estimated efficiency scores. Firm size, diversification, age, risk, reinsurance and leverage are employed as control variables.

From the SFA, the authors find average cost and profit efficiency of 80.08 and 45.71 per cent, respectively. This suggests that non-life insurers have high levels of efficiency in cost and low efficiency in profit. The annual estimates of the P-R H-statistics also suggest that firms in the market earn revenues under conditions of monopolistic competition. The authors find a positive effect of competition on cost and profit efficiency to validate the “quiet-life” hypothesis which posits that competition improves efficiency.

Regulatory policies should be directed towards enhancing competition to improve on the low profit earning potential of firms in the non-life market.

To the best of the authors’ knowledge, this study presents the first application of a non-structural measure of competition to examine the empirical relationship between competition and efficiency in insurance markets.