Work

Determinants of firm-level technical efficiency: evidence using stochastic frontier approach.

Year: 2008

Type: article

Abstract: By estimating stochastic frontiers we investigate the determinants and dynamics of firm efficiency. We use a representative sample of Estonian firms for the period 1993-1999 – and are able to address problems that plague much previous work, such as the endogeneity of ownership. Our main findings are that: (i) foreign ownership increases technical efficiency; (ii) firm size and higher labor quality enhance efficiency, while soft budget constraints adversely affect efficiency; (iv) Estonian firms operate under constants returns to scale; (v) the percentage of firms operating at high levels of efficiency increases over time. As such our findings provide support for hypotheses that a firm’s ownership structure and its characteristics such as firm size, labor quality, soft budget constraints and time of privatization are important for its technical efficiency.

Source: Corporate Ownership and Control

DOI: 10.22495/cocv5i3c1p7

Authors: Evis Sinani, Derek C. Jones, Niels Mygind

Institutions: Copenhagen Business School, Hamilton College

Language: English

Topic: Efficiency Analysis Using DEA

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

Open Access status: hybrid

Funder: National Science Foundation

Award: The Economics of Privatization: Evidence from the Baltics and St. Petersburg