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Article
Publication date: 6 April 2012

Fadzlan Sufian

The purpose of this paper is to provide new empirical evidence on the impact of credit risk on China banks' total factor productivity.

Abstract

Purpose

The purpose of this paper is to provide new empirical evidence on the impact of credit risk on China banks' total factor productivity.

Design/methodology/approach

The paper employs the Malmquist Productivity Index (MPI) which allows for the examination of five different indices: total factor productivity change (TFPCH); technological change (TECHCH); efficiency change (EFFCH); pure technical efficiency change (PEFFCH); and scale efficiency change (SECH) indices.

Findings

The empirical findings indicate that the State Owned Commercial Banks (SOCB), Joint Stock Commercial Banks (JSCB), and City Commercial Banks (CCB) have exhibited lower TFPCH levels with the inclusion of risk factor. It was found that the JSCB and CCB have exhibited lower TFPCH due to TECHCH, while the SOCB have exhibited lower TFPCH due to EFFCH. The empirical findings suggest that the inclusion of credit risk factor has resulted in a higher JSCB EFFCH levels. On the other hand, the SOCB and CCB have exhibited a lower EFFCH levels due to SECH and PEFFCH, respectively.

Research limitations/implications

The results clearly highlight the importance of credit risk and lending quality in determining the total factor productivity change of banks operating in the China banking sector. The author demonstrates that the inclusion of credit risk factor has resulted in a lower TFPCH level of all banks operating in the China banking sector. Thus, excluding the credit risk factor from the analysis on the China banking sector may potentially bias the result upwards.

Practical implications

In an environment of heavy government influence over the lending process, a large proportion of loans extended by Chinese banks over the years have gone bad. Policymakers should prevent the flow of new non‐performing loans by separating bad clients from banks that are being restructured and recapitalized in the reform of the banking sector.

Originality/value

By employing the Malmquist Productivity Index (MPI), the present paper contributes to the existing literature by examining, for the first time, the impact of credit risk on China banks' total factor productivity. To the best of the author's knowledge, this type of analysis is completely missing from the literature in regard to the China banking sector.

Details

China Finance Review International, vol. 2 no. 2
Type: Research Article
ISSN: 2044-1398

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Abstract

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Functional Structure Inference
Type: Book
ISBN: 978-0-44453-061-5

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Article
Publication date: 23 December 2020

Slađana Savović and Predrag Mimović

The purpose of this paper is to explore the effects of cross-border acquisitions on the efficiency and productivity of acquired companies in the cement industry in the…

Abstract

Purpose

The purpose of this paper is to explore the effects of cross-border acquisitions on the efficiency and productivity of acquired companies in the cement industry in the context of a transitional economy.

Design/methodology/approach

The Data Envelopment Analysis (DEA) and Malmquist Productivity Index were used to assess the efficiency and productivity of the acquired companies over the period 2000–2018. DEA and Malmquist index are combined with bootstrapping to perform succinct statistical inferences for determining the accuracy of results. The study assesses partial efficiency and productivity of three inputs: material, capital and labour, as well as the total factor efficiency and productivity of the acquired companies in the short and long term after the acquisitions.

Findings

The research results suggest that efficiency of material, efficiency of labour and the total factor efficiency of the acquired companies are higher after the acquisitions than before, while efficiency of capital is lower. In addition, the results show that the acquisitions had a positive impact on total factor productivity of the acquired companies.

Practical implications

The results of this study have practical implications for managers, especially for policy-makers and industry analysts in deciding whether to encourage or discourage cross-border acquisitions in transitional economies.

Originality/value

The study contributes to a better understanding of the impact of cross-border acquisitions on efficiency and productivity of acquired companies in the manufacturing industry. Research in transitional economies related to subject matter is limited, and this study is the first empirical investigation of the effect of cross-border acquisitions on the efficiency and productivity in the cement industry in Serbia by applying the Data Envelopment Analysis.

Details

International Journal of Productivity and Performance Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 12 October 2010

Abdulaziz M. Jarkas

The objective of this paper is to investigate the effects and relative influence of: grid patterns; variability of foundation sizes; total surface area; and average…

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1086

Abstract

Purpose

The objective of this paper is to investigate the effects and relative influence of: grid patterns; variability of foundation sizes; total surface area; and average surface area, on formwork labour productivity of isolated foundations.

Design/methodology/approach

To achieve this objective, a sufficiently large volume of productivity data were collected and analyzed at both levels; macro, and micro, using the linear regression method. As a result, the effects and relative influence of the investigated factors on formwork labour productivity are determined and quantified.

Findings

The findings show significant impacts of the buildability factors investigated on formwork labour productivity, and substantiate the importance of applying the rationalization and standardization concepts to the design stage of construction projects.

Research limitations/implications

Further research into the effects of buildability factors on formwork, and other related trades of in situ reinforced concrete material, i.e. rebar fixing/installation and concreting, labour productivity, which are common to other structural elements and activities such as, grade/ground beams, columns, walls, beams, and slabs, is recommended, so that the related findings can ultimately be used to develop an automated “Buildability Design Support System” to formalize the buildability knowledge of reinforced concrete construction projects.

Practical implications

The outcomes of this research provide designers with feedback on how well their designs consider the requirements of buildability principles, and the tangible consequences of their decisions on labour productivity. In addition, practical recommendations deduced from the findings are presented, which upon implementation, can improve the buildability level of this activity, hence translate into higher labour efficiency and lower labour costs. On the other hand, the depicted patterns may provide guidance to construction managers for effective activity planning and efficient labour utilization.

Originality/value

The findings fill a gap in buildability knowledge and its influence on formwork labour productivity of an important, labour intensive, activity within the in situ reinforced concrete construction projects.

Details

Journal of Engineering, Design and Technology, vol. 8 no. 3
Type: Research Article
ISSN: 1726-0531

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Article
Publication date: 1 September 1990

Jean K. Thisen

The hypothesis that the growth in total GNP can also be explainedby other factors than the growth in total inputs (capital and labour)and their respective productivities

Abstract

The hypothesis that the growth in total GNP can also be explained by other factors than the growth in total inputs (capital and labour) and their respective productivities is analysed by the use of 1960‐1985 OECD country data. The OLS estimations of the models of embodied and disembodied technical change in both capital services as measured by the R&D expenditures and labour productivity as measured by investment expenditures in education and health showed very significant results. However, despite the inclusion of these expenditures in the aggregate production function, GNP growth has not been fully exhausted in all OECD countries. Indeed, the unexplained residual which was computed for these countries turned out to be of non‐negligible magnitude and growth. The assumed non‐factor sources of growth containing the unexplained residual which may not be associated by the movement along a production function would include non‐quantifiable political, social and institutional forces which, in some cases, might interact to speed or adversely delay growth unless they remain stable or improved.

Details

International Journal of Social Economics, vol. 17 no. 9
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 11 October 2019

Ramaa Arun Kumar and Mahua Paul

This study aims to estimate total factor productivity (TFP) growth for the post-2008 period for selected industries in the manufacturing sector at NIC 3-digit. Total factor

Abstract

Purpose

This study aims to estimate total factor productivity (TFP) growth for the post-2008 period for selected industries in the manufacturing sector at NIC 3-digit. Total factor productivity growth (TFPG) estimates are based on the theoretical framework provided by studies such Hall (1988), Abraham et al. (2009) and Crepon et al. (2005) that incorporate market imperfection in labour and product market, thereby modifying the traditional TFP estimation as Solow Residual.

Design/methodology/approach

Based on the theoretical model that incorporates market imperfections in labour as well as product market in modifying the TFP estimates using the Levinsohn–Petrin framework of empirical estimation, the authors have calculated industry wise TFPG for 62 industries at NIC 3-digit level.

Findings

The study finds three distinct trends: first, there are considerable industrial disparities in productivity growth in terms of TFP. The estimates have been found to be higher than the conventional Solow Residual for most industries, indicating the role played by market imperfections in affecting the conventional measure of productivity growth. Second, estimates of bargaining power are found to be lower than those compared to the earlier estimates in Maiti (2013) for the Indian organised manufacturing case for 1998-2005. This observation is commensurate with the observation in recent years of a falling share in labour wage in total output in organised manufacturing sector. Finally, the study also found a statistically significant contribution of greater mechanisation on TFPG while an adverse effect of the rising dependence of organised manufacturing on contractual labour.

Originality/value

The role of market imperfections in measuring TFPG has been undertaken, and it has been found to be an important factor, as the estimated measures vary from the conventional measures of TFPG. Moreover, the study has considered a very recent period from 2008-2015 in estimating TFPG, as well as analysing the factors behind the trends in TFPG at industrial level.

Details

Indian Growth and Development Review, vol. 13 no. 1
Type: Research Article
ISSN: 1753-8254

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Book part
Publication date: 31 May 2016

Chunyan Yu

This chapter provides a survey of alternative methodologies for measuring and comparing productivity and efficiency of airlines, and reviews representative empirical…

Abstract

This chapter provides a survey of alternative methodologies for measuring and comparing productivity and efficiency of airlines, and reviews representative empirical studies. The survey shows the apparent shift from index procedures and traditional OLS estimation of production and cost functions to stochastic frontier methods and Data Envelopment Analysis (DEA) methods over the past three decades. Most of the airline productivity and efficiency studies over the last decade adopt some variant of DEA methods. Researchers in the 1980s and 1990s were mostly interested in the effects of deregulation and liberalization on airline productivity and efficiency as well as the effects of ownership and governance structure. Since the 2000s, however, studies tend to focus on how business models and management strategies affect the performance of airlines. Environmental efficiency now becomes an important area of airline productivity and efficiency studies, focusing on CO2 emission as a negative or undesirable output. Despite the fact that quality of service is an important aspect of airline business, limited attempts have been made to incorporate quality of service in productivity and efficiency analysis.

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Article
Publication date: 1 April 1989

Khalil Fadil Matta

A weighted multi‐factor productivity index developed for theNational Standard Company is presented. The index monitors theperformance of an organisation and identifies…

Abstract

A weighted multi‐factor productivity index developed for the National Standard Company is presented. The index monitors the performance of an organisation and identifies productivity problems. Key resource factors are defined and a weighting technique, with both subjective and objective attributes, is presented. The index is dynamic and responsive to the changing needs of an organisation and is a goal‐oriented measuring tool.

Details

International Journal of Operations & Production Management, vol. 9 no. 4
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 1 October 2001

Liang‐Hsuan Chen, Shu‐Yi Liaw and Yeong Shin Chen

Since a firm’s management performance can be evaluated in terms of financial ratios, efficient management using financial factors is proposed as the key element for…

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1892

Abstract

Since a firm’s management performance can be evaluated in terms of financial ratios, efficient management using financial factors is proposed as the key element for upgrading a firm’s productivity. Investigates productivity in terms of certain financial factors of large‐scale manufacturing firms in Taiwan. First determines several influential financial factors using factor analysis. Based on these factors, employs fuzzy clustering approaches to categorize the manufacturing firms into several patterns with distinct characteristics of financial factors. Using the characteristics of productivity and financial factors for each pattern, makes two kinds of analysis, and proposes some suggestions to improve the firms’ productivity.

Details

Industrial Management & Data Systems, vol. 101 no. 7
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 13 February 2017

Jorge Benzaquen

The purpose of this paper is to propose and analyze a model to obtain a total factor productivity of an industry through quantitative empirical analysis in order to…

Abstract

Purpose

The purpose of this paper is to propose and analyze a model to obtain a total factor productivity of an industry through quantitative empirical analysis in order to determine the joint contribution of the production and technology function, and the change and technical progress. The case of the Peruvian large shipbuilding industry between the years 1969 and 1990 was considered for the analysis of the proposed model. The large shipbuilding in Peru finished in 1992 and has restarted in 2014. The importance of the study lies in the fact that the analysis is focused on an industry which is resurfacing, and in this regards, the study of the first production period will yield more and accurate information to make decisions regarding its future development.

Design/methodology/approach

One way of considering the several effects of technical progress, in line with Sato (1970) such as growth and bias, is to specify a production function maintaining the linear homogeneity property, such as: Y(t)=F [A(t)K(t), B(t)L(t)], where Y(t) is the aggregate product over a period of time (t); K(t) is the capital; L(t) is the labor; and A(t) and B(t) are the efficiencies or augmentations of K(t) and L(t), respectively. Based on the regression analysis data, the value of σ can be estimated to a residual growth rate (Kennedy and Thirlwall, 1972) that allows assessing the technical knowledge that is not attributable to the factors’ efficiency grains: TCTR = T ˙ / T ( α ( A ˙ / A ) + β ( B ˙ / B ) ) . This last expression measures the residual technological growth rate (TCTR, by its Spanish acronym).

Findings

The results of the analysis of the large shipbuilding at SIMA-Callao during the given period (22 years of operation, between 1969 and 1990) show that the necessary installed capacity and the technological knowledge was available in order to develop a complex industrial process in the South Pacific region, thus, contributing to the sector’s growth in the country. The evolution of the shipbuilding activities coincides with the GDP expansion and decline periods in Peru. According to the results, the total factor productivity increased during 1969-1976, 1979-1982, and 1986-1987 periods and it has been confirmed that the contribution of the efficiencies of the production factors were inversely related to the economies of scale and output growth.

Practical implications

The analysis is based on the activities carried out throughout 22 years of operations in SIMA-Callao shipyards (1969-1990). The data regarding the product, labor, imported materials costs, local material costs, direct expenses, wages, and man-day costs was obtained from several sources within the shipyard. Direct expenses correspond to classification, inspections, administrative expenses (dock, quality control, equipment rental, etc.), drawings, technical data, insurance, and materials freight. Additionally, the sources of information are project construction contracts, annual expenses reports, and man-day cost quarterly reports of the shipbuilding area. The man-day cost includes salary, social benefits, and the company’s functional cost.

Originality/value

There are different ways to obtain productivity index. In this case, the authors used the stated model. In addition, based on this experience, this can be applied to other industries.

Details

International Journal of Productivity and Performance Management, vol. 66 no. 2
Type: Research Article
ISSN: 1741-0401

Keywords

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