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Article
Publication date: 12 June 2020

Zhiguang Li, Yaokuang Li and Dan Long

From the perspective of cause and effect, the operational processes of property insurance companies can be considered as historical events. The purpose of this study is to…

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Abstract

Purpose

From the perspective of cause and effect, the operational processes of property insurance companies can be considered as historical events. The purpose of this study is to measure the operating efficiency of China's property insurance industry, explore the determinants that affect technical efficiency and outline the path to achieving high-quality development.

Design/methodology/approach

We chose 44 Chinese property insurance companies as research objects. The data were obtained from the Chinese Insurance Yearbook and China Statistical Yearbook 2015–2017. First, the data envelopment analysis (DEA) method was used to calculate the technical efficiency of property insurance companies. Then, Tobit regression and quantile regression were adopted to explore the influencing factors of technical efficiency. Finally, the fuzzy-set qualitative comparative analysis (fsQCA) method was employed to summarize the path to improving the operating efficiency of property insurance companies.

Findings

The empirical results in the first stage suggested that the operation efficiency of China's property insurance industry was technically inefficient, and the scale efficiency was relatively better than the pure technical efficiency. In the second stage, we observed that the drivers for firm size, reinsurance rate, claim ratio and equity restriction were important determinants of an insurance firm's efficiency.

Research limitations/implications

We also put forward four applicable, targeted and proven ways to improve the technical efficiency of property insurance companies. These configurations are verified by cases of existing property insurance companies, which can provide practical references for the insurance industry.

Originality/value

Our research enriches the insurance literature and efficiency methods, particularly regarding the specific paths of improving the technical efficiency. The relationship between elements and results is analyzed from a systematic perspective, and the research results are not only more consistent with what logic might imply but also more instructive for the improvement of reality.

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International Journal of Emerging Markets, vol. 16 no. 6
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 10 August 2015

Khalid Al-Amri

The purpose of this paper is to analyze the performance of the Takaful insurance firms in the Gulf Cooperation Council (GCC) countries and do a relative analysis for its…

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Abstract

Purpose

The purpose of this paper is to analyze the performance of the Takaful insurance firms in the Gulf Cooperation Council (GCC) countries and do a relative analysis for its different units.

Design/methodology/approach

This paper analyzes the technical, pure technical, cost and allocative efficiency of Takaful firms in the GCC countries using data envelopment analysis (DEA) methodology.

Findings

The Takaful insurance industry in GCC is highly technical and pure technical efficient. However, it is moderately cost efficient, and there is a large opportunity for improvement. UAE and Qatar score the highest technical efficiency, while Saudi Arabia and UAE are the most cost efficient among the GCC countries.

Originality/value

The primary contribution of this paper is to provide the first DEA analysis of the Takaful industry in the GCC countries. To the best of the author’s knowledge, this is the first study on the Takaful insurance industry that uses different types of efficiency measures, namely technical, pure technical, allocative and cost efficiency, in the GCC countries. This paper also contributes in the literature of the inputs and outputs selection for the Takaful insurance efficiency calculation.

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Humanomics, vol. 31 no. 3
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 26 October 2010

Lakshmi Kumar, D. Malathy and L.S. Ganesh

The purpose of this paper is to understand the influence of technology change in the banking sector by employing data envelopment analysis (DEA) and also to determine the…

Abstract

Purpose

The purpose of this paper is to understand the influence of technology change in the banking sector by employing data envelopment analysis (DEA) and also to determine the change in total factor productivity (TFP) and its components, namely technical change and technical efficiency change.

Design/methodology/approach

The DEA method has been used to assess the efficiency of the entire banking sector and the bank groups. The purpose has been to investigate TFP change and its components' (obtained using Malmquist index) influence on the growth in the banking sector as well as in the four bank groups. In doing so, for each bank group the levels of technical efficiency, technical efficiency change, efficiency change and TFP change have been estimated. Further investigation has been done to determine if significant differences in these exist between the different bank groups in terms of size, time period and ownership. The determinants of productivity have been assessed.

Findings

The TFP growth over the entire period (1995‐2006) was driven by technical change as compared to efficiency change, showing that technology and innovation had a greater impact than efficiency change, or the catch‐up effect. The fixed effects estimates of the determinants of TFP change and its components show that size, ownership and time period exert significant effect on technical change.

Practical implications

The results of the analysis presented in this paper suggest that policies that result in efficiency change are likely to have little impact on the future prospects of the banking sector relative to policies that foster the adoption of the latest technologies. This has exactly been the focus of Reserve Bank of India and though some banks may consider it as an imposition of technology, the result of this requirement appears to be positive as is apparent from this paper's analysis.

Originality/value

The value of this paper comes from the empirical testing that in the Indian banking sector growth in the more recent period came from technology change or frontier shifts as compared to efficiency change. Also, growth is larger due to frontier shifts than due to efficiency change. This endorses Lucas' findings regarding the focus on the positive impacts of deregulation and competition in the Indian banking sector.

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Journal of Advances in Management Research, vol. 7 no. 2
Type: Research Article
ISSN: 0972-7981

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Article
Publication date: 1 February 1992

K.P. Kalirajan and R.T. Shand

In production economics, one of the most interesting questions is that of the causal relationship between technicalefficiency and allocative efficiency. This as yet…

Abstract

In production economics, one of the most interesting questions is that of the causal relationship between technical efficiency and allocative efficiency. This as yet remains a puzzle without a unique answer. There are a few theoretical analyses conceptualizing the relationship, but consensus has not yet been reached, and empirical tests are rare. Presents the empirical results of applying Granger’s (1969) and Sims’ (1972) causality tests using time series data on technical and allocative efficiencies of random samples of Indian farmers. These causality tests, with respect to technical and allocative effciences show that there is unidirectional causality from technical efficiency to allocative efficiency, and that the causative process is not bidirectional.

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Journal of Economic Studies, vol. 19 no. 2
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 22 November 2011

Supannika Wattana and Deepak Sharma

In the early 1990s, the Thai government initiated a process of reform of the electricity industry with the argument that such reform would improve the performance of the…

Abstract

Purpose

In the early 1990s, the Thai government initiated a process of reform of the electricity industry with the argument that such reform would improve the performance of the industry and contribute to enhancing the overall economic prosperity. The purpose of this paper is to examine the veracity of this argument by analysing both the technical and environmental performance of the Thai electricity industry.

Design/methodology/approach

A data envelopment analysis‐based methodology is employed in this study to measure the productivity of the Thai electricity industry, for the period 1980‐2006. This method enables the decomposition of productivity changes into technical and efficiency changes, and hence enables one to determine if changes in productivity are due to electricity reform (efficiency gains) or due to autonomous technological improvements.

Findings

The study reveals that the increase in the productivity of the Thai electricity industry over the period 1980‐2006 was mainly driven by technological improvements and that industry reform has had insignificant impact on productivity. Further, the impacts of electricity reform on the environment appear to be relatively modest – this too was driven by government regulation that supports the use of less environmentally detrimental fuels for electricity generation by the private producers, rather than electricity reform.

Originality/value

The analysis in this paper contributes to the literature on productivity and efficiency, by applying the DEA method to a time series data for a single industry. Additionally, the analysis of environmental performance of the Thai electricity industry – to the best of knowledge of the authors – is the first of its kind for the Thai electricity industry.

Details

International Journal of Energy Sector Management, vol. 5 no. 4
Type: Research Article
ISSN: 1750-6220

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Article
Publication date: 8 June 2015

Weihua Jiao, Zetian Fu, Weisong Mu, Xiaoshuan Zhang, Jianjun Lu and Mark Xu

The purpose of this paper is to estimate the technical efficiency of Chinese table grape wholesalers and subsequently to examine the degree to which the calculated…

Abstract

Purpose

The purpose of this paper is to estimate the technical efficiency of Chinese table grape wholesalers and subsequently to examine the degree to which the calculated efficiency correlates with a set of explanatory variables.

Design/methodology/approach

A two-stage procedure is applied in this paper. First, a non-parametric data envelopment analysis (DEA) technique is applied to investigate the degree of technical efficiency for Chinese table grape wholesalers. Second, Tobit regression is used to analyze the factors influencing technical efficiency.

Findings

Research results reveal that the mean technical efficiency of the sample is 0.544 and 0.860 under constant returns scale (CRS) and VRS assumptions, respectively, and the scale efficiency (SE) is 0.620. The variables of experiences, number of grape varieties on sale, daily selling volumes and fixed sale ratio have a significant effect on technical efficiency, while the other exogenous variables do not affect the efficiency in any significant way.

Research limitations/implications

The findings of this research are specific to table grape wholesalers in China, however, the method used in this study is transferrable and applicable to the study of similar problems in others countries.

Originality/value

This research has yielded some interesting and original insights into the efficiency level of Chinese grape wholesalers and the factors that influence the level of efficiency. The findings have practical implications for Chinese agriculture policy makers, and are able to stimulate further research of a similar type in the international agricultural research community.

Details

British Food Journal, vol. 117 no. 6
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 25 November 2019

Harishankar Vidyarthi

The purpose of this paper is to examine the dynamics between income diversification and performance (cost, profit, revenue, technical, pure technical and scale efficiency

Abstract

Purpose

The purpose of this paper is to examine the dynamics between income diversification and performance (cost, profit, revenue, technical, pure technical and scale efficiency) for 38 listed Indian banks within panel data framework during the period 2004-2005 to 2015-16.

Design/methodology/approach

This study computes bank’s cost, profit, revenue, technical, pure technical and scale efficiency within intermediation approach with data envelopment analysis (DEA) as a performance indicator, followed by exploring the association between income diversification and bank performance using truncated Tobit regression within panel data framework.

Findings

Tobit regression results revealed inverted U-shaped relationship between the income diversification and estimated efficiency parameters for the overall panel. Size and bank intermediation ratio seems to be a major factor in exploiting the potential benefits of income diversification. The author reconfirmed the inverted U-shaped relationship with these efficiency parameters for exclusive subsamples consisting of government-owned and private sector banks.

Research limitations/implications

Inverted U-shaped relationship between the income diversification and estimated efficiency parameters suggest that banks should go for limited diversification to improve performance. Thus, regulators and banks should pursue limited diversification strategy for improving banking efficiency.

Originality/value

This study computes bank performance (cost, profit, revenue, technical, pure technical and scale efficiency) based on DEA followed by exploring the association between performance and income diversification for 38 Bombay stock exchange listed banks.

Details

Journal of Financial Economic Policy, vol. 12 no. 3
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 1 February 2004

M.K. HASSAN, A. AL‐SHARKAS and A. SAMAD

The paper investigates relative efficiency of the banking industry in Bahrain by employing a panel of 31 banks for the years 1998 and 2000. We employ non‐parametric (Data…

Abstract

The paper investigates relative efficiency of the banking industry in Bahrain by employing a panel of 31 banks for the years 1998 and 2000. We employ non‐parametric (Data Envelopment Analysis) to examine five efficiency measures, namely, cost, allocative, technical, pure technical and scale efficiency scores. We also investigate the conventional accounting measures of performance, and correlate them with five measures of efficiency to investigate whether higher accounting performance impact the bank cost efficiency. Our results show that, on the average, the banking industry in Bahrain is profitable with average ROE and ROA being 10.36% 1.622% in 1998 while 13.49% and 2.097% in 2000 respectively. The average allocative efficiency (inefficiency) is about 73% (37%), whereas the average technical efficiency (inefficiency) is about 56% (78%). This indicates that the dominant source of inefficiency in Bahrain banks is due to technical inefficiency rather than allocative inefficiency, which is mainly attributed to diseconomies in scale. Overall, average scale efficiency (inefficiency) is about 79% (26%), and average pure technical efficiency (inefficiency) is about 71% (41%), suggesting that the major source of the total technical inefficiency for Bahrain banks is pure technical inefficiency (input related) and not scale inefficiency (output related). The results also indicate that all banks have improved their efficiency levels and experienced some gains in productivity. Finally, regression analysis is used to investigate the determinants of the overall efficiency scores. We find that larger and profitable banks are more likely to operate at a higher level of efficiency. Also, another finding reveals that market power plays an important role in cost and technical efficiencies. Notably, banks with greater contribution from shareholders tend to be more technical efficient

Details

Studies in Economics and Finance, vol. 22 no. 2
Type: Research Article
ISSN: 1086-7376

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Book part
Publication date: 14 December 2018

Muhammad Asraf Abdullah and NurulHuda Mohd Satar

This chapter examines the influence of outsourcing on airlines’ performance from countries of the Asia Pacific region. Performance in the context of this study is drawn…

Abstract

This chapter examines the influence of outsourcing on airlines’ performance from countries of the Asia Pacific region. Performance in the context of this study is drawn from productivity growth and technical efficiency scores that are calculated using the standard data envelopment analysis (DEA) approach. We utilize data from airlines over the period 2003–2011 and estimate the impact of outsourcing on productivity and technical efficiency using generalized method of moments (GMM) estimators. The findings from DEA reveal an improvement in the technical efficiency score of airlines from Asia Pacific. Nonetheless, productivity estimates indicate fluctuations in the productivity growth trend of airlines, attributable to global economic recession in 2007/2008. GMM estimation results, however, suggest negative impacts of outsourcing on technical efficiency and productivity of the airlines from Asia Pacific countries. We offer several explanations for these outsourcing findings. Heavy outsourcing of airlines activities particularly maintenance of aircraft may negatively affect aircraft utilization and ultimately erode the service level of airlines. The erosion of the service level of airlines would affect the demand for air travel in a downward manner, thereby lowering the technical efficiency and productivity of airlines. Also, relatively low labor costs enjoyed by airlines in the Asia Pacific region would suggest that having many airline activities in-house would save operating expenses attributable to labor costs.

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Article
Publication date: 29 January 2020

Wei Wu

The purpose of this paper is to estimate the degree of technical efficiency, determinants of technical inefficiencies and driving forces behind the production growth for a…

Abstract

Purpose

The purpose of this paper is to estimate the degree of technical efficiency, determinants of technical inefficiencies and driving forces behind the production growth for a panel data set collected during the 1998/1999 and 2004/2006 Kharif cropping season, from 452 small-scale rice farming households in the Giridih and Purulia districts of Eastern India.

Design/methodology/approach

The estimations of technical efficiency utilize stochastic frontier production function with a sub-model of inefficiency effects at both aggregated farm level and disaggregated plot level where traditional varieties (TVs) and high-yielding varieties (HYVs) are differentiated. The output growth decomposition analysis identifies the main contributor to the total rice production growth.

Findings

The results indicate that the sampled farms are operated at moderate levels of technical efficiency. The production of HYV rice is associated with higher technical efficiency compared to TV rice. Farming experience, education attainment, landholding size, the share of non-agricultural income and the share of land in the lower terraces account for the differences in technical inefficiencies across the sampled farms. The decomposition analysis suggests that as technical efficiency decreased, technical change is the main source of production growth during the survey period.

Research limitations/implications

The small sample size applied in the analysis will result in an insufficient representativeness of the study area.

Originality/value

This paper fills the literature gap as estimations of technical efficiency that account for subtle differences in adopted rice varieties are still rare in India.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 10 no. 2
Type: Research Article
ISSN: 2044-0839

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