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This study investigates peer effects and agglomeration impacts on the cost efficiency of South Korean rice farms using a five-year panel dataset of production costs. We employed a time-varying stochastic frontier cost function approach to estimate cost efficiency and a linear-in-means model to quantify peer influences. The findings underscore peer effects as central to understanding and enhancing farm productivity, particularly in rice farming regions. Both specialisation and diversity of agglomeration positively influenced efficiency, with specialisation having a larger impact. Peer effects were stronger in highly rice-specialised areas. These findings indicate the necessity of incorporating peer influences and regional specialisation in agricultural policymaking for productivity enhancement. A nuanced, evidence-based approach leveraging peer dynamics and agglomeration economies is advocated to boost the efficiency of farming practices.

This research analyses the efficiency of pre-and-post-merger Bank Syariah Indonesia (BSI). This research used a descriptive quantitative analysis method. The population in this research is Islamic banks, which were merged into BSI. The sampling technique was carried out using saturated samples, resulting in the merged of three Islamic Banks, namely Bank Syariah Mandiri (BSM), Bank Negara Indonesia Syariah (BNIS), Bank Rakyat Indonesia Syariah (BRIS), to become BSI. The data used is secondary data in the form of quarterly financial reports for 2019-2022. The research focused on input variables such as total fixed assets, third-party funds, operating costs, and financing. The data analysis techniques used to measure the efficiency of Islamic banks are the Econometric Model (Single Equation Model), Stochastic Frontier Analysis (SFA), and Independent Sample t-test. The result showed that pre-merger, the total fixed asset, total third-party funds, and operating cost as the input variables of the three Islamic Banks were optimal for generating financing. Therefore, the total assets, total third-party funds, and operating costs produced a more optimal impact on the distribution of total financing. It is shown that BSI, both pre-and-post-merger, has generally been efficient in its operational activities. The results of this research complement the theory related to the efficiency level of Islamic banks in terms of the amount of financing as measured by fixed assets, total third-party funds, and operational costs. Practically, the results of this research can be a reference for banks, especially Islamic banks, that will carry out mergers to measure their efficiency level.

This paper presents total factor productivity (TFP) growth analysis with a panel Stochastic Frontier Approach (SFA) for 26 Türkiye regions from 2004 to 2020. The study is a pioneer in the literature on decomposing TFP growth components at the regional level with the translog production function for the Turkish economy. This work has a fresh approach regarding adjusting the schooling of employment and involving macroeconomic factors in the inefficiency function. The numerous specification tests show considerable production inefficiencies. Therefore, the production frontier is estimated using the True Fixed Effects (TFE) model. The empirical findings reveal that human capital is the primary driver of output growth. Technical efficiency is estimated to be 90.6% on average, with 9.4% of potential output lost due to technical inefficiency. It has been determined that there has been technical progress in labor-saving. Trade has a negative effect on technical efficiency. These findings contribute to understanding TFP change in the Turkish economy with regional data. [ABSTRACT FROM AUTHOR]

Energy efficiency gains are advocated to be a plausible strategy to mitigate rising carbon emissions in the Indian transportation sector. This study, thus, estimates the energy efficiency across transportation modes in India for 2000–2014, employing the panel stochastic frontier approach. Further, the long-run effect of energy efficiency gains on carbon emissions is also examined by employing the panel fully modified least square (FMOLS) and panel dynamic ordinary least square (DOLS) estimators. The empirical findings indicate an inverted U-shaped trend in energy efficiency for land transportation and a substantial rise for air transportation with higher volatility. However, the trend in energy efficiency for water transportation only shows a minor uptick with nearly stable movement. The long-run effect reveals that a 1% increase in energy efficiency will reduce carbon emissions in the transportation sector by more than 1%, between 1.343 (FMOLS) and 1.665% (DOLS). Based on such findings, a few implications are discussed to achieve a low-carbon energy system. [ABSTRACT FROM AUTHOR]

Most empirical studies evaluating efficiency in the agricultural sector estimate cost efficiency, assuming homogeneity across firms. However, achieving the goal of profit maximisation requires both minimising costs and maximising revenue. Unlike cost efficiency, the concept of profit efficiency considers the errors on both the input side and the output side, and thus, it is more appropriate for evaluating the overall performance of firms. This paper estimates profit efficiency and its determinants in the agricultural sector in Spain using a Bayesian stochastic frontier model with random coefficients. This methodology adequately captures the heterogeneity across firms in the industry. The results reveal, firstly, that agricultural firms in Spain are operating with an average profit inefficiency of 35.78% and, secondly, that this inefficiency is affected, albeit unevenly, by the size and age of the farm. Finally, the implications of these results for managers and public policies are discussed.

Most empirical studies evaluating efficiency in the agricultural sector estimate cost efficiency, assuming homogeneity across firms. However, achieving the goal of profit maximisation requires both minimising costs and maximising revenue. Unlike cost efficiency, the concept of profit efficiency considers the errors on both the input side and the output side, and thus, it is more appropriate for evaluating the overall performance of firms. This paper estimates profit efficiency and its determinants in the agricultural sector in Spain using a Bayesian stochastic frontier model with random coefficients. This methodology adequately captures the heterogeneity across firms in the industry. The results reveal, firstly, that agricultural firms in Spain are operating with an average profit inefficiency of 35.78% and, secondly, that this inefficiency is affected, albeit unevenly, by the size and age of the farm. Finally, the implications of these results for managers and public policies are discussed. [ABSTRACT FROM AUTHOR]

Most soybean farming in Indonesia is still performed conventionally. Farmers are less interested in cultivating soybeans because the production yields are relatively small. This research aims to determine the factors influencing production, production inefficiency of soybean, and the technical efficiency (TE) and economic efficiency (EE) level of soybean farming. Primary data were collected using a survey method of soybean farmers in paddy field areas in the Tabanan Regency of Bali Province, Indonesia. Data were analyzed using the stochastic frontier approach using the Frontier 4.1 analysis tool. Factors that positively affected the increasing soybean production were land area, urea and NPK fertilizers, and soybean seeds. The factor positively affecting soybean production inefficiency was a farming experience. The average TE value was 0.77, implying that soybean farming in the study area was efficient. However, the EE value below 0.70 implied that soybean farming was inefficient. Based on soybean farmers’ farming experience, TE and EE values were getting lower. The low value of EE was suspected of causing farmers’ low interest in cultivating soybean.

We observe the main efficiency drivers of European Banking Groups after the burst of the Global Financial Crisis. This analysis is a live issue within the studies in the field of intermediation. The observed period (2010–2021) is emblematic of the complexity of the financial market in the last two decades. The efficiency levels derive from a stochastic frontier approach; a k-means cluster analysis distinguishes the units into three homogeneous groups, so that the main determinants of the higher level of efficiency can be identified. They are linked to a particular business model, specific managerial choices, costs rationalization and liquidity optimization.

AbstractThis study assessed the profit efficiency of red onions smallholder farmers in Sironko district of eastern Uganda. A structured questionnaire was employed to collect data from 216 randomly selected red onion producers. Data analysis was done using descriptive statistics, gross margin, and the Cobb-Douglas type of stochastic profit frontier function model. Results showed that red creole and Afri seed were the only varieties of red onions that were grown in the study area. Onion production was characterized by limited access to credit, extension services, and farmers’ group membership. The gross margin (GM) and returns on investment (ROI) analyses revealed that red onion production was profitable in Sironko district. An average of UGX 884,500 (~USD 241) for Afri seed producers and UGX 1,724,414 (~USD 469) for red creole were obtained per acre of land. Although the farmers made profits, their profitability could be improved by up to 19% through harnessing factors that influence profit efficiency. These factors were cost of seeds (p

China's banking system has a relatively high level of state control, while an important task in regulating the banking system is to manage the profitability of banks. Using the stochastic frontier approach to assess the profitability of commercial banks not only allows for the bank's ability to generate profits relative to the leading banks in the industry to be assessed but also takes into account the specifics of the management technologies used and the influence of the market environment. This article analyzes the profitability of the Chinese banking system for the period 2012–2020 using the stochastic frontier approach from the position of the central bank. The specifics of the analysis from the bank's perspective imply a focus on the position of most banks regarding the level of best practices and trends in changing the overall level of profitability. Analysis may be of interest to banking regulators and researchers. In general, the Chinese banking system demonstrates a high level of profit efficiency and cost efficiency, although the dynamics of these indicators are negative. The reason for the negative dynamics is a decrease in the economic growth rate of the economy, the instability of the financial market and ongoing reforms. State-owned commercial banks are becoming highly profitable, while national joint-stock commercial banks are facing increasing competition and reducing efficiency of profitability. City and rural commercial banks maintain a high level of profitability due to state support. [ABSTRACT FROM AUTHOR]

This paper examines the profit efficiency of the banks in Bangladesh using the stochastic frontier analysis. The paper is prepared based on the secondary data only and the sample contains data from 25 banks including state owned and private conventional banks in Bangladesh from the year 2011 to 2020. Translog function has been employed to construct the profit function and Battese and Coelli 1995 (BC95) model has been used to determine the profit efficiency. The efficiency performance reveals that, on average, banks in Bangladesh are 80.73% profit efficient. Dutch-Bangla Bank Limited (DBBL) is the most profit efficient banks with a score of 92.56% in 2020. While Dhaka Bank is the least profit efficient banks with a score of 15.42%. Banks belong to the 3rd and 2nd generation are the most profit efficient. Besides, none of the inefficiency determinant is statistically significant to explain variation in the profit inefficiency as the dataset is small and only limited to Bangladeshi banks. Moreover, diagnostic tests such as Normality test, M3T statistics test and Likelihood Ratio (LR) test have been performed to confirm the existence of inefficiency. This report shall provide important insight of state owned and private conventional banks in Bangladesh to the managements, regulators and other concerned parties.

A strong construction industry is critical to any country's economic and infrastructural development. Facing declining business prospects in the domestic market, Taiwanese construction firms have sought new opportunities overseas, particularly in the mainland Chinese market. Without an adequate understanding of the market, making such investments involves significant risks. To better understand the differences in the markets, this study investigates the technical efficiency (TE) of the Taiwanese construction industry compared to mainland China. The focus was on TE values of construction companies across the two markets as well as the strengths and weaknesses to help inform the decision-making process. The TE evaluation was completed using the stochastic frontier approach (SFA) with a subinput efficiency model to evaluate three inputs (assets, costs, and labor) of 123 construction companies with 59 companies in mainland China and 64 companies in Taiwan. Results show that for the key asset investment factors in Taiwan's construction industry, TE is lower than that in mainland China. However, Taiwan's construction industry was found to have higher labor efficiency than mainland China. Relative to mainland Chinese companies, Taiwanese companies have advantages in both labor inputs and revenue outputs but are disadvantaged in terms of the firm and market size. This study shows that Taiwanese construction firms are positioned to pursue expansion into mainland China, ideally by establishing cooperative alliances. Results also show that government policy needs to ensure construction companies are supported by increased economic freedom and reduced restrictions, as these positively correlate with the revenue of local construction companies. [ABSTRACT FROM AUTHOR]

The private sector, in order to function properly, needs financing from the national financial sector, and so the efficiency and competitiveness of said financial sector arouse the interest of many researchers, who perform analyses in order to provide authorities and decision makers with relevant information for the decision-making process and the design of their financial policies. This study contributes to this line of research, analyzing both technical and economic efficiency (allocative and cost efficiency) in the financial sector, focusing on banks, using a sample of Equatorial Guinean firms during the period of 2013–2019. Furthermore, the competitiveness of the financial sector is also analyzed. Knowing how efficient and competitive the financial sector is could answer many of the questions that arise when regulating the national business sector. To carry out this analysis, parametric approaches such as stochastic frontiers and non-parametric techniques such as data envelopment analysis are used, as well as different competitiveness indicators (Boone, Panzar–Rosse). During the research, it is found that the banking sector, which represents the financial sector of the country, operates with low levels of technical efficiency: the Cobb–Douglas production function and the trans-logarithmic production function showed similar average efficiency results. Regarding competitiveness, the financial sector operates under monopolistic competition. Therefore, much remains to be achieved to improve the efficiency and competitiveness of the financial sector for the development of Equatorial Guinea. It is the responsibility of economic agents to provide a good business climate in the country and guarantee perfect competition in the financial market to promote national development. [ABSTRACT FROM AUTHOR]

The study examines an interstate analysis of the efficiency of secondary education in India during the year 2014- 15 using a stochastic production frontier approach. The mean achievement score (MAS) is treated as output, and the number of institutions (NI) and pupil-teacher ratio (PTR) are treated as two primary inputs. As per the availability of data, four explanatory variables: Gender Parity Index (GPI), percentage expenditure in Sarva Shiksha Abhiyan (SSA), percentage of schools with Drinking Water Facility (DWF), and percentage of schools with Girl’s Toilet (GT) are chosen which are assumed to affect the efficiency of secondary education. The results show that primary input pupil-teacher ratio (PTR) and inefficiency effects variables: percentage expenditure in SSA and percentage of schools with GT have significant contributions in the MAS of secondary education in India. [ABSTRACT FROM AUTHOR]

The article proposed a number of SFA (Stochastic Frontier Approach) cost and profit efficiency evaluation models, which were built on the basis of performance indicators of the largest Ukrainian leasing companies. Since the SFA models are sensitive to the choice of independent variables, the article proposed to use the average value of the obtained estimates based on the constructed SFA models when analyzing the efficiency of the leasing companies. This approach makes it possible to obtain a more comprehensive and complete assessment of efficiency, which takes into account many more aspects of the leasing company business. It has been argued that the main problem in applying the SFA approach with a larger number of independent variables to assess the efficiency of Ukrainian leasing companies is the lack of statistical data, as they have only recently begun to publish their financial statements for public access. The construction of SFA models requires the development of appropriate econometric models and an appropriate statistical sample. The total costs of leasing companies and their net profit were taken as dependent variables. Independent variables were selected from such indicators of the leasing company's activity as net income from product sales, other operating income, fixed assets, administrative expenses, other operating expenses, and long-term receivables. The presence of the effect of the inefficiency of Ukrainian leasing companies was checked and the type of function that best approximates the efficiency limit was determined. Testing of these hypotheses was done on the basis of a generalized likelihood ratio test at a 95% confidence interval for all models. The null hypotheses were rejected for all four constructed models, i.e., the translogarithmic function was used to approximate the efficiency frontier. [ABSTRACT FROM AUTHOR]

AbstractAquaculture potential as a source of food security, protein, income, employment and poverty alleviation can be realized through improved production efforts in Zimbabwe. A survey was conducted in three districts of Masvingo to assess rural small-scale fish farmers’ perception and technical efficiency. Data was collected from 63 fish farmers using a primary cross-section approach. The field study was conducted from July to September 2021. A stochastic frontier production model (with technical inefficiency effects) was used to assess production. There were 73% male respondents, the average age was 51 years and 73% had attained formal education up to primary, secondary or tertiary level. Fish farming system was in earthen ponds stocked with mixed-sex tilapia fingerlings, collected mainly from the wild and fed mostly on local farm bi-products. The Cobb-Douglas production function was applied to relate production output to input variables. Results indicated significant positive correlation between the production output and the quantity of fingerling and feed inputs. Pond size had an inverse relation with production output. Fingerling and fish feed quality significantly reduced technical inefficiency, however, time allocated to fish farming and education insignificantly reduced technical inefficiency. Experience significantly increased technical inefficiency, but age, training, gender and occupation insignificantly increased technical inefficiency. Fish farmers were operating at 67% technical efficiency. The significance of input quantity and quality on aquaculture output, in the current study, informs any future aquaculture development plans in Zimbabwe, to consider investing in training and capital support.

У статті було запропоновано низку SFA (Stochastic Frontier Approach) моделей оцінювання ефективності за витратами та за прибутком, які побудовано на основі показників діяльності найбільших українських лізингових компаній. Оскільки SFA-моделі є чутливими до вибору незалежних змінних, у статті було запропоновано при аналізі ефективності функціонування лізингових компаній використовувати середнє значення отриманих оцінок на основі побудованих SFA-моделей. Такий підхід дає змогу отримати більш комплексну та повну оцінку ефективності, яка враховує значно більше аспектів ведення бізнесу лізинговими компаніями. Було аргументовано, що головна проблема в застосуванні SFA-підходу з більшою кількістю незалежних змінних для оцінювання ефективності функціонування українських лізингових компаній полягає в нестачі статистичних даних, адже лише недавно вони почали оприлюднювати свою фінансову звітність для загального доступу. Побудова SFA-моделей потребує розроблення відповідних економетричних моделей та належної статистичної вибірки. У ролі залежних змінних було взято сукупні витрати лізингових компаній та їхній чистий прибуток. Незалежні змінні вибирались із таких показників діяльності лізингових компаній, як чистий дохід від реалізації продукції, інші операційні доходи, основні засоби, адміністративні витрати, інші операційні витрати, довгострокова дебіторська заборгованість. Було проведено перевірку наявності ефекту неефективності українських лізингових компаній та визначення типу функції, яка найкраще апроксимує границю ефективності. Перевірку цих гіпотез було зроблено на основі узагальненого тесту відношення правдоподібності на 95 % довірчому інтервалі для всіх чотирьох моделей. Нульові гіпотези були відхилені для всіх чотирьох побудованих моделей, тобто для апроксимації границі ефективності було використано транслогарифмічну функцію.

This paper investigates the impact of corruption on bank efficiency. Using the stochastic frontier approach, we examine the link between corruption and cost efficiency on a broad sample of commercial banks in 126 countries over the period 2011–2018. We find evidence of a negative effect of increased corruption on bank cost efficiency. Additionally, the results show that the adverse impact of corruption on bank efficiency is observed for banks of all sizes and countries with different levels of economic development. Overall, our findings suggest that anti-corruption policy measures are important for improving efficiency in the banking system. [ABSTRACT FROM AUTHOR]

Tea ranks third after coffee and fish in terms of export value in Uganda’s crop sector. Smallholder productivity and efficiency in Uganda remains a paradox, especially in perennial crops, with past research presenting mixed results on allocative efficiency. The objective of this study was to determine allocative efficiency and its influencing factors among smallholder tea farmers in western-Uganda. A cross-sectional survey dataset was collected from a random sample of 170 tea farmers from Kabale and Kanungu districts in south-western Uganda. The study employed a Stochastic Frontier Approach and the Value of Marginal Product Approach in determining the input elasticities and allocative efficiency levels respectively. Results showed that average allocative efficiency scorers for land, fertiliser, labour and herbicides were 11.17, 1.68, 3.08 and 4.43, respectively; indicating under-utilisation of the inputs. Ordinary Least Squares estimates indicated that allocative efficiency score of fertiliser was positively related to farm size, herbicide type and extension visits. The allocative efficiency score for herbicides was positively influenced by extension access and herbicide type. Similarly, the allocative efficiency score for land was positively influenced by extension access while that of labour was positively influenced by farm size. The results indicate that increasing the scale of tea production in the region is likely to improve productivity and profitability since the average allocative efficiency scores were greater than unity. [ABSTRACT FROM AUTHOR]

Banks prefer to lend to bigger clients for a variety of reasons, including transaction costs and risk considerations. Due to this phenomenon, the Central Bank of Indonesia issued a regulation that requires banks to channel a minimum proportion of their credit portfolio to micro, small, and medium enterprises (MSMEs). Nevertheless, the impact of channeling funds to MSMEs remains a subject of controversy, in part depending on the dimensions and metrics used. This study examines how MSME lending affects the efficiency of banks in Indonesia, a country where MSMEs constitute more than 99% of business entities. Using a total of 175 panel data observations of banks in Indonesia from 2014–2018, banks’ cost efficiency is first estimated using a stochastic frontier approach (SFA). Panel data regression is used to examine the impact of MSME lending on efficiency. The result of this study shows a significant and positive impact of the proportion of MSME lending on bank efficiency, which indicates that requiring banks to channel funds to MSMEs does not only potentially support economic development, but also is beneficial from the business perspective in the Indonesian context. AcknowledgmentThe research was also made possible with the support of PUTI Grant by Universitas Indonesia No. NKB-2036/UN2.RST/HKP.05.00/2020.

This study investigates the impact of issuing sukuk (Islamic bonds) on the issuing banks’ efficiency, in selected GCC countries by applying stochastic frontier approach with translog cost function. The empirical application covers 13 Islamic banks and conventional banks providing Islamic windows, from Saudi Arabia, UAE, and Qatar, using quarterly data from Q3 2009 to Q2 2019. The results show that issuing Islamic bonds (sukuk) increases bank efficiency, through increasing financial leverage and liquidity. The results of the cost frontier analysis suggest that higher input prices bring more funds that increase bank efficiency. The results of output variables indicate that higher output leads to higher total cost. However, the higher order terms of output variables have a negative relationship with cost, suggesting that doubling bank output could diminish total cost.

We compare the economic and econometric assumptions of two contemporary procedures for the estimation of markups, the stochastic frontier approach (SFA) and the production function approach (PFA), and apply them to EU food retailing over the period 2010–2018. Although, the estimates of the underlying technology of the two methods are similar, our results suggest that the PFA leads to significantly larger markups, yielding approximated excess consumer expenditures 58.14%–313.33% larger than predicted by the SFA. In addition, the correlation of markups between the two methods is low. This can have implications for the consistency of policy recommendations based on the SFA and the PFA as they yield different outcomes with respect to the state of competition in a market. Last, we find a link between market concentration and markups for the PFA pointing towards adverse effects of further concentration on consumer welfare, whereas our results show no evidence for a relationship between SFA markups and market concentration. [EconLit Citations: D22, D43, L11, L13, L81, Q18] [ABSTRACT FROM AUTHOR]

The private sector, in order to function properly, needs financing from the national financial sector, and so the efficiency and competitiveness of said financial sector arouse the interest of many researchers, who perform analyses in order to provide authorities and decision makers with relevant information for the decision-making process and the design of their financial policies. This study contributes to this line of research, analyzing both technical and economic efficiency (allocative and cost efficiency) in the financial sector, focusing on banks, using a sample of Equatorial Guinean firms during the period of 2013–2019. Furthermore, the competitiveness of the financial sector is also analyzed. Knowing how efficient and competitive the financial sector is could answer many of the questions that arise when regulating the national business sector. To carry out this analysis, parametric approaches such as stochastic frontiers and non-parametric techniques such as data envelopment analysis are used, as well as different competitiveness indicators (Boone, Panzar–Rosse). During the research, it is found that the banking sector, which represents the financial sector of the country, operates with low levels of technical efficiency: the Cobb–Douglas production function and the trans-logarithmic production function showed similar average efficiency results. Regarding competitiveness, the financial sector operates under monopolistic competition. Therefore, much remains to be achieved to improve the efficiency and competitiveness of the financial sector for the development of Equatorial Guinea. It is the responsibility of economic agents to provide a good business climate in the country and guarantee perfect competition in the financial market to promote national development.

This study aims to analyze the efficiency of the pharmaceutical industry (ISIC code: 21012) in Indonesia. The data used in this study are secondary data from 2000 to 2015. The analysis technique used in this study is the Stochastic Frontier Approach. Based on the results of the analysis, it can be seen that the pharmaceutical industry in Indonesia of 2000-2015 in technically it has not Reached amount of 0.96455986 optimal efficiencies. The capital variable does not have a significant effect on the output produced by the producer in the pharmaceutical industry, while the labor variable has it.

Agricultural income can be increased and the sector can become more competitive with the efficient use of resources in agriculture. This work; was carried out to determine the technical efficiency levels of the apple growing businesses in the TRB1 Region and to determine the factors that affect the technical efficiency levels. The main material of the study was obtained by faceto- face surveys conducted during the 2018-2019 production period covering 223 enterprises producing apples using stratified random sampling method. Technical efficiency analysis was carried out by using Cobb-Douglas production function via Stochastic Frontier Approach in the R package program. It has been determined that the apple farms are 71% technically efficient. We arrive a conclusion that farms in Malatya province than that of Elazıg and farms in Elazıg than that of Bingol are technically efficient. It is concluded that the amount of production at the same input level can be increased by approximately 29% in the enterprises examined. Determining the optimum amounts of inputs used in apple cultivation in the region during the production phase is of great importance in order to increase efficiency. [ABSTRACT FROM AUTHOR]

Using an annual survey industries unit level data pertaining to year 2014-15 from India, this paper examines the technical efficiency of sugar mills. A Stochastic Production Frontier (SFA) approach has been applied to measure technical efficiency of 490 sugar mills. The empirical results show that on an average sugar mills have 54% technical efficient, despite presence of considerable variations of technical efficiency among the selected states. This paper establishes a repertoire of management regimes varying in technical efficiency. It further reveals a significant difference in organization specific average technical efficiency of sugar mills across states. Overall, sugar mills are running under decreasing returns to scale. The emergent suggestion is to bring improvement in capital input use which is more effective than the labour input and augmentation in liability asset ratio. The management of less efficient mills needs to imbibe the best practices in terms of technology, policy and institutions of more efficient mills operating in other states.

Inefficiency is one of the factors that can decrease the bank’s health. Efficiency was very important for banking. Efficient banking will increase total assets and profitability. This study examined the cost efficiency of sharia banks and their effects on total assets and profitability. This study aimed to analyze the effect of cost efficiency and other financial ratios on total assets and profitability. By using a stochastic frontier approach, it was found that the average cost efficiency level in sharia bank was 85.18 percent. Furthermore, by using a panel regression method in 12 sharia banks, it was found that cost efficiency had a negative effect on total assets but did not affect the profitability of sharia banks. In addition to cost efficiency, CAR also had negative effects on total assets. FDR and NPF had a negative effect on profitability which proxied by ROA while profitability proxied by ROE negatively affected by NPF. Sharia banking should pay attention to the level of cost efficiency, capital adequacy, and financing quality in order to increase total assets and profitability.

The main purpose of this paper is to investigate the interaction effects of risk, capitalization and inefficiency in Iran's banking system. For this purpose, combined data of commercial and private banks of Iran in years (1999-2012), were collected and analyzed using simultaneous equation approach and fixed effects two-stage least squares (FE2SLS), The results confirm the belief that these three variables are simultaneously determined. The results indicate that relationship between inefficiency with quality of loans is significant and positive. Capitalization and loan growth have positive effect on inefficiency. Capital accumulation will decrease quality loans. Capital accumulation also has negative effects on the quality of banking risk indicator.On the other hand ,due to the inefficiency of the banking system's cost and return on assets on capital accumulation, banks that aren't in a good position in terms of performance, are not in a right position in terms of equipping and capital accumulation either.

Using data for a set of 823 R&D-intense manufacturing firms within the Triad and the Quality of Government (QoG) dataset over the 2002–2010 period, this article investigates the effects of institutional quality upon firms' inefficiency, through the application of a Stochastic Frontier Approach (SFA). Empirical evidence, which is robust to alternative specifications of the technology employed and different lag structures in R&D activities, reveals that improvements in the quality of institutions significantly reduce firms' inefficiency and suggests that, among the set of relevant institutional factors considered, a pre-eminent role is found for the rule of law. [ABSTRACT FROM AUTHOR]

The cooperative landscape in Ethiopia is very heterogeneous with a mixture of remains of the pre-1991 government-controlled system and new post-1991 bottom-up collective action initiatives. This heterogeneity, coupled with a large growth in the number of cooperatives in the country, offers an interesting perspective to study the determinants of the (in)efficiency of cooperatives. In this paper, we analyse the performance of Ethiopian agricultural cooperatives, focusing on the degree of technical (in)efficiency and its determinants. We use the stochastic frontier approach in which we account for heteroskedasticity and the monotonicity of production functions, presenting a methodological improvement with respect to previous technical efficiency studies. The results show that NGO- and government-initiated cooperatives are less efficient than community-initiated ones, implying that governments and NGOs should not interfere too strongly in cooperative formation. Cooperatives with a high degree of heterogeneity in members' participation are found to be about 98% less efficient, while cooperatives that have paid employees are 33% more efficient. Besides, results show that cooperatives in Ethiopia function more efficiently if they incentivize committee members through monetary compensation. [ABSTRACT FROM AUTHOR]

• The relationship between recycling rates and competitiveness of firms is tested. • Recycling rates deal with packaging waste, e-waste and bio-waste. • Competitiveness of firms refers to: gross investment, employees and value added. • Stochastic frontier analysis shows that all recycling rates affect competitiveness. • Inefficiency function reveals that R&D spending positively affects competitiveness. The present paper aims to investigate the relationship between achieved recycling rates and the competitiveness of firms working in circular economy sectors. The econometric analysis is based on the Stochastic Frontier Analysis (a parametric model) and is carried out in reference to seventeen European countries over the years 2010–2016. It reveals intriguing results about the positive effect that achieved recycling rates of packaging, electronic and bio-waste can exert on the competitiveness of firms, although differences emerge across the countries considered. Furthermore, through the inefficiency function, a positive effect of R&D spending on competitiveness of European firms is disclosed. [ABSTRACT FROM AUTHOR]

Apple production sector in Albania is growing very fast in Albania but research about apple production efficiency is almost absent. This research aims at assessing the technical efficiency and factors affecting it for the Albanian apple farms. Data of 150 randomly selected farmers in the area of Korça region are analyzed with the Stochastic Frontier Approach. The average level of technical efficiency results 88%, with 12% potential for improvement. The efficiency gap is about 21%. Major factors with positive effect on technical efficiency result the access to advisory services, average plots size, number of apple plots; education and proportion of orchards under modern technology have negative effects; age, and farmer’s experience are not significant. Measures to support planting of apples should take into account the size of plots. There is much space to improve extension services to farmers, so adequate policies are needed to support farmers with training, information to improve their skills and knowledge, to ensure they are supplied with quality inputs and technologies at reasonable prices, and policies to improve farmers access to markets.