Academic literature on the topic 'Stochastic meta-frontier'

This study explains the differences and variances in the efficiency scores of the Vietnamese banking sector retrieved from 27 studies published in refereed academic journals under the framework of meta-regression analysis. These scores are mainly based on frontier efficiency measurements, which essentially are Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) for Vietnamese banks over the period of 2007–2019. The meta-regression is estimated by using truncated regression to obtain bias-corrected scores. Our findings suggest that only the year of publication is positively correlated with efficiency, whilst the opposite is true for the data type, and sample size.

This study examines the impact of employing temporary workers on technical efficiency (TE) by employing stochastic frontier analysis (SFA) and meta-frontier analysis (MFA). These two statistical methods yield slightly different, yet empirically meaningful, results. SFA—the more conventional methodology for conducting efficiency analysis—confirms that firms with temporary workers show a somewhat lower level of TE; while MFA, which allows a comparison of TE across groups with heterogeneous technologies, reveals that firms hiring temporary workers are technologically less efficient and have a more pronounced relative gap in efficiency. With the application of MFA, it was observed that firms hiring only temporary workers come farther to the meta-frontier than their counterparts.

The aim of this study is to compare the technical efficiency of System of Rice Intensification (SRI) and Conventional Rice Production System (CRPS) farmers in Mali. Using cross-sectional data for 208 randomly selected rice farmers, the Stochastic Meta Frontier model is applied. The results indicate that the mean technical efficiency is 0.96 and 0.79 for SRI and CRPS respectively. This implies that SRI farmers were more technically efficiency than their counterpart. Similarly, the mean technology gap ratio was 0.98 and 0.91 for SRI and CRPS farmers, respectively. We also find that rice paddy production (SRI) was positively influenced by labor and negatively by organic manure while rice paddy production (CRPS) was positively linked with inorganic fertilizer and land. Further investigation reveals that family labor and flooding level increased the technical inefficiency for SRI adopters whereas education had a negative impact. For the CRSP farmers, the current factors were unable to account for technical inefficiency except age of farm household head. Our study finds strong cause to encourage SRI adoption as it could be the highly searched for solution for farmers to increase their yields and eventually enhance their food security status.

The market performance of a company is greatly influenced by the functional experience of the chief executive. In the case of a small startup, the functional experience of the chief executive is even greater. Based on career data of chief executives, this study first classifies startups in the information and communication technology (ICT) industry into four different groups. In addition, this study analyzes the effect of the CEO’s experience on the market performance of ICT startups by deriving the efficiency of each company using the financial data of ICT startups provided in the database. This study estimates the technical efficiency of each group using stochastic frontier analysis and then uses meta-frontier analysis to compare the efficiency of different groups. As a result, the CEO group with a career in strategy and planning showed the highest meta-frontier efficiency, whereas the CEO group with a career in R&D showed the lowest.

<p>We measure cost and revenue efficiency of the Islamic and conventional Malaysian banks by using the stochastic frontier method and the meta-frontier analysis (MFA) over the period 2006-2012. The use of MFA allows for the correction of the efficiency measurement errors caused by the technological and operational gap. The specific as well as the common frontiers obtained by the stochastic frontier method show the superiority of Islamic banks (IBs) compared to conventional banks (CBs) in terms of cost and revenue efficiency. This can reflect their high managerial capability. Efficiency measurement using MFA partially revealed different results. CBs have higher annual averages of cost efficiency scores than those of IBs over the period 2006-2011. The observed evolutionary trends of these averages contradict those of the capital base. This change in results is explained according to Johnes et al. (2013) by the modus operandi of IBs which seems in average less efficient than that of CBs. As for revenue efficiency, IBs are more efficient than CBs over the entire study period even though the evolution of the technological gap ratio confirms the inefficiency of their modus operandi. These results may be useful to political decision-makers and regulatory authorities. ch indicate the complexity of the audited firm and the characteristics of the audit.</p>

This paper investigates the spillover effect (backward, forward, and horizontal linkage) of foreign direct investment (FDI) firms on the technical efficiency of local firms. This research extends the literature by employing meta-frontier framework analysis which is superior to single stochastic analysis because each industry has a different combination of inputs (or dissimilar production technology). Using a large data set (178,700 firm-year observations), this paper finds evidence on the negative impact of the horizontal and forward linkages on the meta-technical inefficiency for the data set as a whole as well as in three economic regions, in private owned firms, and capital and labor-intensive sectors in Vietnam.

Doutoramento em Economia
Neste trabalho, através de uma meta-análise, pretende-se integrar os resultados obtidos nos estudos sobre a eficiência, realizados no sector energético, e analisar se as decisões metodológicas influenciam os valores de eficiência estimados. Os dados são constituídos por 162 modelos reportados em 63 artigos científicos que analisaram empiricamente o nível de eficiência no sector energético no período de 1979 a 2013. Através de um modelo de meta- regressão, a investigação focaliza-se em tentar perceber que efeitos podem ter as diferentes especificações dos modelos nos valores estimados para a eficiência. Analisa-se o impacto que as variáveis - revista no qual o estudo é publicado, ano de publicação, método paramétrico versus não paramétrico, tipo de função, forma funcional aplicada, orientação input versus output, distribuição do erro, efeitos aleatórios versus efeitos fixos, dimensão da amostra, tipo de dados, ano a que se referem os dados e número de variáveis output incluídas - podem ter no nível de eficiência estimado para as unidades de produção e distribuição energética. Os resultados parecem demonstrar que o ano de publicação do artigo, opção pela função custo, a forma funcional translog, a distribuição semi-normal para o termo de erro, dados de painel e o número de variáveis output têm um impacto negativo no cálculo da estimativa da eficiência. Por outro lado, a opção pelo modelo de efeitos aleatórios tem um impacto positivo. Relativamente à média dos anos de observação e dimensão da amostra, os resultados demonstram que não existe qualquer efeito relevante. Existe evidência estatística, a um nível de significância de 5%, para afirmar que as variáveis Energy Economics journal, modelos paramétricos, orientação input e rendimentos variáveis à escala produzem efeito positivo na estimativa da eficiência. Por último, o modelo especificado neste trabalho e os resultados obtidos permitem acomodar outras variáveis que tenham como objectivo o aprofundamento e futuros desenvolvimentos deste trabalho.
In this paper, through a meta-analysis, we intend to integrate the results obtained in studies conducted on the efficiency in the energy sector and try to understand if indeed the methodological decisions influence the efficiency values estimated. The data consist of 162 models reported in 63 scientific articles that empirically analyzed the level of efficiency in the energy sector from 1979 to 2013. Through a meta-regression model, the research focuses on trying to understand what effects may have the different specifications of the models in the estimated values for efficiency. We analyze the impact of variables - journal in which the study is published, year of publication, parametric versus nonparametric method, type of function, functional form applied, input versus output orientation, error distribution, random effects versus fixed effects, sample size, data type, the year to which they relate data and number of output variables - can have on the estimated level of efficiency for units of energy production and distribution. The results demonstrate that the year of publication of the article, the option cost function, the translog functional form, the half-normal distribution for the error term, panel data and the number of output variables have a negative impact on the calculation of the estimate value of efficiency. Moreover, the choice of the random effects model has a positive impact. For the average of years of observation and sample size, the results demonstrate that there is no significant effect. There is statistical evidence, a 5% significance level, for asserting that the variables Journal Energy Economics, parametric method, input orientation and variables returns to scale produce positive effect on the estimation of efficiency. Finally the model specified in this study and the results indicate the possibility of integrating other variables that aim to deepen this work and future developments of this work are indicated.

Esta dissertaÃÃo busca analisar as diferenÃas tecnolÃgicas da produÃÃo agropecuÃria entre os municÃpios situados nas grandes regiÃes brasileiras, com enfoque especial para o Nordeste brasileiro. Como aporte metodolÃgico, utilizou-se o modelo de meta-fronteira tecnolÃgica proposta por Battese, Rao e OâDonnell (2004) e OâDonnell, Rao e Battese (2008), para responder atà que ponto essas diferenÃas regionais influenciam na eficiÃncia da produÃÃo e qual os seus impactos nos municÃpios. A anÃlise foi dividida em dois modelos. No Modelo 1 propÃs-se analisar e identificar as diferenÃas tecnolÃgicas da produÃÃo agropecuÃria entre os municÃpios situados nas grandes regiÃes brasileiras, exceto pela regiÃo Norte, por questÃes metodolÃgicas. Jà o Modelo 2 voltou-se à diferenciaÃÃo tecnolÃgica da produÃÃo agropecuÃria existente no semiÃrido e no nÃo-semiÃrido do Nordeste. A hipÃtese assumida nesta pesquisa à a existÃncia de um processo de heterogeneizaÃÃo tecnolÃgica do meio rural brasileiro e que esta diferenciaÃÃo impacta no nÃvel de eficiÃncia tÃcnica da produÃÃo agropecuÃria nas diferentes regiÃes do Brasil e mesmo dentro de uma mesma regiÃo. Detectou-se que esta hipÃtese se mostrou verdadeira para os dois Modelos. O Modelo 1 indicou que a tecnologia de produÃÃo agropecuÃria praticadas nos municÃpios situados nas regiÃes Sul e Centro-Oeste sÃo mais avanÃadas. Jà em relaÃÃo ao Modelo 2, os resultados indicaram que, quando comparadas as duas regiÃes, o nÃo-semiÃrido possui a maior eficiÃncia tÃcnica mÃdia em referÃncia à meta-fronteira.
This thesis analyzes the technological differences in agricultural production between municipalities located in the great Brazilian regions, with a special attention on the Brazilian Northeast. As methodological support was utilized the meta-frontier model, proposed by Battese, Rao and OâDonnell (2004) and OâDonnell, Rao and Battese (2008) to answer how these regional differences influence the efficiency of production and like this spatial heterogeneity impacts on municipalitiesâ technical efficiency (TE). The analysis was divided into two models. The first one proposes to analyze and identify the technological differences in agricultural production between the municipalities located in the Brazilian regions, except in the North region, for methodological reasons. On the other hand, the second one searches for the technological differentiation of agricultural production in the semi-arid and non-semiarid regions of the Northeast. For present thesis, the hypothesisis is the existence of a process of technological heterogenization of the Brazilian rural production and that this differentiation affects the level of TE of agricultural production between different regions of Brazil and within the same region as well. It was found that this hypothesis proved to be true for both models. The Model 1 revealed that the production technology practiced in the municipalities located in the South and Center-West regions are more advanced. Regarding the Model 2 indicated that the non-semiarid has the highest average TE with reference to the meta-frontier, when compared to the semiarid region.

La tesi mira innanzitutto a verificare l’esistenza delle differenze tecnologiche tra i sistemi bancari islamici e quelli convenzionali nelle regioni MENA e SEA, e in secondo luogo ad investigare l’impatto della produttività bancaria sulla crescita economica nella regione MENA. Questa tesi è stata strutturata con lo scopo di rispondere ai seguenti quesiti di ricerca: 1. Le banche islamiche sono più efficienti sotto il profilo dei costi rispetto alle loro controparti convenzionali? 2. Esistono differenze nella tecnologia (o nelle tecnologie impiegate) tra le banche islamiche e le banche convenzionali? 3. Quale impatto ha l’efficienza bancaria dei costi sulla crescita economica della regione MENA? E la crescita influenza a sua volta l’efficienza stessa? Abbiamo iniziato con una panoramica del sistema bancario islamico, le radici della finanza islamica e le sue fondamenta. Poi abbiamo condotto un’analisi empirica con lo scopo di rispondere al primo e al secondo quesito della ricerca. I nostri risultati suggeriscono che le banche islamiche sono leggermente meno efficienti dal lato dei costi rispetto alle loro omologhe banche convenzionali. Interessante notare che le differenze evidenziate in termini tecnologici tra le due industrie bancarie sono state piccolissime. È emerso il fatto che le banche islamiche non sono sufficientemente coinvolte negli schemi di condivisione dei profitti e perdite ma tendono a replicare i prodotti delle banche convenzionali attraverso una “islamizzazione” degli stessi. La nostra seconda analisi empirica nel quarto capitolo ci ha consentito di rispondere al terzo quesito della ricerca. Il nostro scopo in questa analisi era quello di rintracciare il nesso tra l’efficienza bancaria (dei costi) e la crescita. Con i nostri risultati abbiamo potuto evidenziare che le banche, nei paesi scelti nella regione MENA mostrano elevati livelli di efficienza dei costi. Abbiamo trovato un significativo e positivo nesso di causalità e una relazione inversa tra il maggior grado di sviluppo dei mercati finanziari e la produttività delle banche. Infine possiamo suggerire che bisognerebbe concentrare gli sforzi sull’efficienza negli investimenti e nell’incrementare la regolamentazione per spronare un sistema finanziario stabile e favorire un maggior grado di sviluppo del sistema finanziario nel futuro, visto che questo potrà permettere un ciclo virtuoso tra sviluppo finanziario e la produttività delle banche.
This thesis investigates, through three essays, the cost efficiency of the banking system in the Middle East and North Africa, and the South East Asia regions. Firstly, it provides empirical evidence on the technology gap between Islamic and conventional banking in both regions, and then investigates the nexus between cost efficiency and economic growth in the Middle East and North Africa region specifically. The first chapter provides a theoretical framework for Islamic finance and banking beforehand and aims to explain the foundations of Islamic finance along with an overview of the two banking models in practice. We underline the importance of the profit and loss sharing schemes as a cornerstone for Islamic finance contribution to social welfare. The second chapter offers an empirical study to investigate the existence of a technology gap between Islamic and conventional banking (due to Quranic law compliance) resulting in different cost efficiency levels. By focusing on twelve emerging countries from the Middle East and North Africa, and the South East Asia regions, between 2000 and 2006. We apply a Metafrontier approach finding that, on average, both types of bank display similar mean cost efficiency and technology levels. At the country level, we find substantial cost efficiency differences, but these are not due to the technology gap. The third chapter examines the nexus between cost efficiency and economic growth in the Middle East and North Africa region. We apply a causality analysis between cost efficiency and financial deepening using the Generalized Methods of Moments and our findings show a significant and positive causality and reverse relationship between financial deepening and banking productivity. We introduce a set of control variables associated with the long run growth and find an interesting interaction with banking productivity and financial deepening suggesting that efforts should be focusing on the investments’ efficiency and the increase of regulation to spur a more stable financial system and foster financial deepening in the future.

Research Doctorate - Doctor of Philosophy (PhD)
Islamic banking has grown in importance in the world financial system over the last decade and hence its risk and efficiency compared to conventional banking have become a subject of considerable interest to practitioners, academics and policymakers. The extant literature on risk in Islamic banking examines the difference in credit risk and insolvency risk between Islamic and conventional banks (e.g., Abedifar, Molyneux & Tarazi, 2013; Mollah et al., 2017) but ignores the liquidity risk and operational risk, and the effects of Shariah supervisory board composition on such risk attributes. There is also a strand of studies which compared the efficiency of Islamic banks with their conventional counterparts but this body of literature is still in its infancy. Previous studies estimate efficiency using a common efficient frontier (e.g., Abdul-Majid, Saal, & Battisti, 2010; Alqahtani, Mayes & Brown, 2017) in spite of the fact that two bank groups operate under different technological, regulatory and market conditions. The common efficient frontier does not make a distinction between group-specific efficient frontier of a bank group and the meta-efficient frontier of the entire industry and hence overestimates efficiency scores. The stochastic meta-frontier framework overcomes the problem of using a common frontier but no prior study uses it for Islamic and conventional banks. The examination of the role of Shariah supervisory board governance and regular board governance on the efficiency of Islamic banks was also beyond the scope of prior studies. This thesis aims to address these research gaps, by conducting three empirical studies with a large sample of Islamic and conventional banks from 28 countries. The first study examines the risk in Islamic banks in comparison with conventional banks, and the impact of Shariah supervisory board (SSB) composition on Islamic banks’ risk-taking. Unlike our predecessors, this thesis examines a comprehensive array of risk measures such as liquidity risk, credit risk, operational risk and insolvency risk for a matched-pair sample of 94 Islamic and 94 conventional banks during 2003–2014. This study finds that Islamic banks are more exposed to liquidity risk but less exposed to credit risk and insolvency risk when compared with their conventional counterparts. Two bank groups are indistinguishable in terms of operational risk measures. The SSB composition, such as SSB size and SSB members’ academic qualifications, are found to be negatively related to Islamic banks’ operational and insolvency risks but SSB members’ reputation is found to be positively related to those risks. The impact of SSB attributes are less pronounced for liquidity and credit risks. The joint effect of regular board governance and SSB governance shows that the presence of a dual-board system in Islamic banks is conducive to reducing operational and insolvency risks. The second study investigates the difference in technical efficiency between Islamic and conventional banks and the role of Shariah governance to explain technical inefficiency in Islamic banks. While prior studies examine a gross measure of technical inefficiency presuming that these two bank groups operate under a common technical efficient frontier, this study examines group-specific technical inefficiency, technology gap and meta-inefficiency for both bank groups, under a stochastic meta-frontier framework as proposed by Huang, Huang and Liu (2014). The common efficient frontier approach disregards the within-group efficiency difference and the technology gap representing the difference between a bank group’s efficient frontier and the meta-frontier of the entire banking industry. We find that a typical Islamic bank is 15.8 percentage points more technically inefficient compared to its conventional counterpart. This is due to Islamic banks not readily adopting and implementing the best available production technology. Furthermore, a stronger Shariah supervisory board has been found to reduce technical inefficiency in Islamic banks. In the third study, the risk-adjusted cost- and profit efficiency of Islamic and conventional banks have been investigated considering corporate governance factors as potential determinants of inefficiency. The cost- and profit functions have been used under a stochastic meta-frontier framework to estimate group-specific efficiency, cost gap ratio, profit gap ratio and meta-efficiency for both bank groups. Incorporating bank risk measures in the efficiency estimation, this study finds that, compared to conventional banks, Islamic banks are 4 percentage points more cost efficient, but 17 percentage points less profit efficient on a risk-adjusted basis. Islamic banks’ cost frontier is closer to the risk-adjusted cost meta-frontier but their profit frontier is far away from the risk-adjusted profit meta-frontier when compared with that of conventional banks. Stronger SSB governance reduces Islamic banks profit inefficiency. Overall, this thesis finds evidence of divergence between Islamic and conventional banks in terms of risk and efficiency. The findings of this thesis have several policy implications. For bank managers, this thesis may help to identify sources of risk and inefficiency, and device strategies to mitigate them. The findings of this thesis may also help Shariah standard-setting bodies (e.g., IFSB, AAOIFI) to develop guidelines for managing Islamic banks’ risk and increasing their access to a wider range of banking products and technologies for higher efficiency.