financial performance analysis of ontario canada credit unions an application of dea in the regulatory environment abstract models are developed to detect weaknesses in credit unions in ontario canada so that potential financial failures can be predicted four data envelopment analysis dea models are presented and compared with the equity to asset ratio and with the government regulator s extensively modified z score model the equity asset ratio is shown to provide as good a prediction of failure as any of the other models and is not improved upon by the much more complex z score model the best dea model provides results comparable to the equity asset ratio when a slack adjusted efficiency score is used to measure efficiency particularly for credit unions with larger asset sizes however dea also provides indications of where opportunities lie for improvements by weak units by providing specific information relevant to managers hence for each credit union comparison is made with a peer group of efficient entities that the inefficient institution s management can emulate to improve their performance

myopia redistribution and pensions this paper reviews a number of recent contributions that study pension design with myopic individuals its objective is to explore how the presence of more or less myopic individuals affects pension design when individuals differ also in productivity this double heterogeneity gives rise to an interesting interplay between paternalistic and redistributive considerations which is at the heart of most of the results that are presented the main part of the paper is devoted to the issue of pension design when myopic individual do not save enough for their retirement because their myopic self with a high discount rate emerges when labor supply and savings decisions are made some extensions and variations are considered in the second part in particular we deal with situations where labor disutility or preferences for consumption are subject to habit formation and where sin goods have a detrimental effect on second period health myopic individuals tend to underestimate the effects of both habit formation and sinful consumption which complicates public policy

profit efficiency among basmati rice producers in pakistan punjab farm specific profit inefficiency among basmati rice producers was estimated from a variable coefficient profit frontier the mean level of inefficiency at farm resources and price levels was 28 with a wide range 5 87 average loss of profit was rs 1 222 per hectare socioeconomic factors related to profit loss were the farm household s education nonagricultural employment and a credit constraint institutional determinants of profit loss were a water constraint and the late application of fertilizer punjab wide benefits of increasing farmer s profit efficiency are large a 25 reduction in profit loss among basmati rice producers may generate over rs 240 million in extra profits each rice season rice is a major export commodity for pakistan generating about 2 5 billion pakistan rupees rs annually or 20 of foreign exchange earnings from commodity trade in the early 1980s two varieties dominate in pakistan s international trade in rice basmati 370 a high quality long grained aromatic variety and the medium long grained irri 6 distinct export markets exist for these rices over 90 of the basmati is exported to oil rich middle eastern nations while the mediumlong varieties are mainly marketed in southeast asia in 1983 the export price of basmati was about rs 7 900 per ton while the price of medium long grained varieties averaged rs 2 700 per ton pakistan has a comparative advantage in the international market for basmati but probably not for medium long grained rices azhar and mamhud historically pakistan had a near monopoly in international trade in basmati but now faces increased competition from thailand and the united states efferson therefore pakistan must strive to increase the efficiency of basmati production to retain its comparative advantage and competitive edge in foreign rice markets basmati 370 is a pure line selection made in

assessing the economic costs of a foot and mouth disease outbreak on brittany a dynamic computable general equilibrium analysis abstract outbreaks of animal diseases such as foot and mouth disease fmd are of great concern for agriculture in this paper we quantify the potential dynamic impacts of such a disease on brittany a french region with an important livestock sector in order to do this we develop a dynamic computable general equilibrium model that allows us to measure the impacts on the livestock sectors and downstream food industries we study the impacts of a fmd outbreak including the culling infected animals a temporary decline in demand and restrictions on movements of live animals and meats during the fmd outbreak period our results show that economic losses following this disease are spread over many periods even with a one time shock we also find that the impacts on the various primary sectors and downstream food sectors are quite different depending on their initial trade position our general equilibrium results show the great incidence of potential constraints affecting factor markets capital and wage constraints severely increase the aggregate costs of such disease these results challenge the definition of a simple efficient management policy for this disease

institutional sources of boundary spanning structures the establishment of investor relations departments in the fortune 500 industrials the authors analyze the coercive and mimetic conditions leading to the establishment of investor relations departments among fortune 500 industrial firms during the 1984 1994 period the results show that antimanagement resolutions brought to a vote by social movement activists significantly contributed to the establishment of investor relations departments intense scrutiny by financial analysts also impelled firms to create such departments whereas social movement activists framed shareholder rights as a problem and compelled organizations to uphold them professional analysts subtly coerced organizations to signal their commitment to investor rights by creating boundary spanning structures that solution was transmitted through board interlocks to other organizations

investment crowding out firm level evidence from northern germany michalek j ciaian p and kancs d a investment crowding out firm level evidence from northern germany regional studies the main objective of this paper is to estimate the extent to which firm investment is substituted crowded out by investment support policies granted under the european union rural development programme rdp the empirical analyses employed the difference in difference propensity score matching approach which allows several important sources of bias to be addressed such as selection bias simultaneity bias and functional form misspecification from which many previous studies suffer using panel data of 1333 firms from the schleswig holstein region in germany it is found that the crowding out effect of the rdp is close to 100 implying that firms use public support to substitute for private investments furthermore no evidence was found that due to the rdp programme support firms would have brought forward their investments planned originally for a later period rejecting t

the role of financial analysts in the strategy formation process of business firms increasingly financial analysts are influencing the strategy formation process of corporations but so far little attention has been paid to the complex processes of interaction and the corresponding strategic outcomes this article discusses these influences through different theoretical lenses strategic management finance and accounting theory and economic sociology institutional and systems theory based on case study evidence from three companies we describe how the interactions between financial analysts and business firms take place and formulate several propositions on the relationship between financial analysts and business firms as well as on its influence on the strategic outcome of business firms the results suggest that the influence of financial analysts is indeed significant but depends on a number of contextual factors such as the financial situation of the company or the need for capital practicing managers can learn how to handle a turbulent environment such as the financial analyst community and how they can change their planning processes to absorb as much information as possible

spatial allocation and the shadow pricing of product characteristics abstract the paper considers an industry transforming primary commodities farm products into processed commodities food products it focuses on the allocation of embedded characteristics carbohydrate protein etc both across space and among commodities the approach generates a spatial competitive market equilibrium of production consumption transformation and trade for both primary and processed commodities along with the spatial distribution of shadow prices for the product characteristics the model provides a basis for analyzing the allocation and pricing of agricultural products food products and characteristics in spatial markets the empirical usefulness of the model is illustrated in the context of regional resource allocation in the u s dairy sector

does capital market structure affect farm investment a comparison using french and british farm level panel data this article considers whether differences in the structure of agriculture credit markets in france and the united kingdom alters the investment sensitivity to financial variables particularly cash flow using two panel datasets of french and british farms three approaches are used to test the sensitivity of investment to internal finance an inventory investment model a fundamental q model and euler equations for machinery investment the results suggest that the contrasting capital markets structures do induce differences in overall investment sensitivity to cash flow and its pattern across both farms with varying levels of collateral and between inventory and machinery investment this article explores whether differences in the structure of agricultural credit markets in france and the united kingdom affects access to credit theoretically asymmetric information in capital markets means that banks base their lending decisions on factors such as available collateral rather than projected profitability stiglitz and weiss binks and ennew hubbard if such information costs are affected by market structure the organization of the market also becomes a potentially important factor historical differences in the structure of agricultural capital markets in developed countries have long been recognized oecd in particular in many countries specific agricultural credit institutions for example farmer cooperative banks appeared in the first half of the twentieth century because of the difficulties faced by farmers in obtaining credit from commercial lenders the degree of state involvement in agricultural credit markets has also varied considerably across countries from

do analysts generate trade for their firms evidence from the toronto stock exchange abstract it has generally been assumed that the potential commission revenue is an important determinant of a sell side analyst s decision of what firms to cover and what information to publicly release however because stock volume has not been disaggregated on a brokerage firm level uncertainty remains regarding the economic importance of the relation between analyst coverage and brokerage firm volume using a unique data set that identifies the broker s involved in each trade i find that brokerage volume is significantly higher in covered stocks than in uncovered stocks on average brokers increase their market share in covered stocks by 3 8 relative to uncovered stocks

internal net worth and the investment process an application to u s agriculture recent models of firm investment decisions stressing informational imperfections in capital markets provide a foundation for interpreting evidence that movements in internal finance can predict investment spending even after one controls for measures of firms investment opportunities while such evidence is suggestive it is often open to other interpretations we examine these models using data on equipment investment in the u s agricultural sector this sector is particularly interesting because it has experienced large fluctuations in net worth and the profitability of investment and reasonable measures of net worth can be constructed our findings provide support for a class of internal funds models of investment under asymmetric information

scale characterizations in a dea directional technology distance function framework abstract the present study extends prior research on data envelopment analysis dea based returns to scale in view of the fact that the standard methods are very restrictive the extension is made in the context of the directional technology distance function that generalizes the shephard input and output distance functions the two main results in this extended setting are as follows first we show how banker s most productive scale size mpss concept is characterized second we obtain scale elasticity measures and examine the properties and the relationships with standard scale elasticity measures

empirical measurement of credit rationing in agriculture a methodological survey empirical analysis of rural credit market failure has been of key scientific and political interest in recent years the aim of this article is to give an overview of the various methods for measuring credit rationing that are employed in the literature furthermore the methods are subjected to a comparative evaluation of their specific strengths or shortcomings six approaches are distinguished measurement of loan transaction costs analysis of qualitative information collected in interviews analysis of quantitative information collected in interviews using the credit limit concept analysis of spill over effects with regard to secondary credit sources econometric household modeling and the econometric analysis of dynamic investment decisions an explicit comparison with a first best solution is impossible in the first three approaches since they essentially rely on a subjective assessment of borrowers access to credit based on qualitative or quantitative indicators the fifth and sixth approaches allow a rigorous interpretation in the framework of neoclassical equilibrium theory the fourth approach takes an intermediate position since spill over on segmented loan markets reveals a willingness to pay with regard to the supposedly less expensive but rationed primary source the approaches are fairly data demanding in general usually requiring specific data on loan transactions even so most approaches are applicable to cross sectional household data with the exception of the first all methods surveyed might plausibly be used to empirically detect credit rationing

short and long run credit constraints in french agriculture a directional distance function framework using expenditure constrained profit functions this empirical application investigates the eventual presence of credit constraints using a panel of french farmers the credit constrained profit maximization model proposed by fare grosskopf and lee is extended in three ways first we rephrase the model in terms of directional distance functions to allow duality with the profit function second we model credit constraints in the short run and investment constraints in the long run using short and long run profit functions third we lag the expenditure constraint one year to account for the separation between planning and production we find empirical evidence of credit and investment constraints financially unconstrained farmers are larger perform better and seem to benefit from a virtuous circle where access to financial markets allows better productive choices

an analysis of production efficiency differentials in the philippines in the late seventies and early eighties policy makers in many developing encouraged extensive research to develop appropriate rice technology for unfavourable rainfed environments the question addressed in this paper is whether the farmers producing under the non irrigated rainfed environments are achieving the potential of the technology fully at the farm level the empirical analysis which concerns the farm level production behaviour of rainfed rice farmers in the philippines indicates a wide variation in production efficiencies extension advice and credit availability appear to be the two major factors influencing the gap between farmers actual and potential production levels

credit constraints their existence determinants and implications for u s farm and nonfarm sole proprietorships the objective of this study is to determine the effect of credit constraints on production for farm and nonfarm sole proprietorships a propensity score matching estimator is employed to provide unbiased estimates of the production impacts of being denied credit the empirical results demonstrate that the value of production is significantly lower for credit constrained sole proprietorships if this drop in the value of production is aggregated to a national level it constitutes only 3 and 13 of total value of production for farm and nonfarm sole proprietorships respectively copyright 2009 oxford university press

analyzing components of productivity growth using the bennet lowe indicator an application to welsh sheep farms this article introduces the bennet lowe total factor productivity tfp indicator the proposed measure is difference based additively complete and transitive we also develop a general nonparametric framework to exhaustively decompose all bennet type tfp indicators including the one introduced here into technical change technical efficiency change scale efficiency change and mix efficiency change this decomposition provides a powerful tool for policy makers to guide financial decisions on research and development extension subsidies and price support the empirical application focuses on the welsh sheep sector for the years 2001 2014 the results show that in this 14 year period welsh sheep farms increased their tfp by 30 28 on average 2 33 p a however the exhaustive decomposition shows that tfp growth is not distributed equally across all farms with an increasing divergence between front runners and laggards the negative values of scale efficiency change and mix efficiency change cast doubt on the current subsidy policies

explicit lagrange multiplier for firms facing a debt ceiling constraint abstract this paper provides the explicit expression of investment facing a binding debt ceiling and the explicit expression of the lagrange multipliers related to the binding debt ceiling constraint this result allows us to check for misspecification of the parameterizations of these lagrange multipliers used in euler investment equations tests during the 1990 s

energy abatement in chinese industry cost evaluation of regulation strategies and allocation alternatives abstract for chinese industry the costs of different energy consumption abatement scenarios are evaluated by the method of directional distance function these scenarios are based on the combinations of regulation strategies and allocation alternatives the former are sectors and provinces and the latter include the five principles of average intensity share absolute share discriminatory absolute and discriminatory intensity for all the scenarios the quantitative impacts in terms of output potential loss are calculated and compared due to less output potential loss for all the allocation alternatives the sector regulation strategy is shown to be more effective than the province regulation strategy it is also demonstrated that among all the scenarios considered the sector regulation based on the intensity share principle and the province regulation based on the absolute share principle are the two optimal the performances of energy abatement allocation of the 11th and 12th five year plans of china are assessed against the simulated scenarios

fundamental q cash flow and investment evidence from farm panel data this study used a 1976 1992 panel data set to test whether farm machinery investors face finance constraints tests were based on fundamental q investment equations in which cash flow was added as an additional explanatory variable results indicated that 1 credit constraints were generally not a problem during the 1970s boom 2 credit constraints became a problem during the 1980s and early 1990s because of tighter credit and or more conservative financial managerial styles 3 the investment cash flow relationships of low debt and older operator farms were not significantly affected by farm business cycles and 4 the investment cash flow relationships of high debt and young operator farms were affected strongly by business cycles debt level was the strongest determinant of credit constraints asset size and operator age were less important

expenditure constraints and profit maximization in u s agriculture the u s agricultural sector is undergoing some of its most severe financial problems since the great depression numerous reports have emerged of large numbers of farmers being unable to obtain short term oper

success in maximizing profits and reasons for profit deviation on dairy farms the weak axiom of profit maximization wapm was used to test how successful each of 70 individual new york state dairy farms was in maximizing profits using nine years of data the netput vectors were corrected for technological change using nonparametric indices that do not require the assumption of profit maximization nor any functional form for the underlying technology these technology indices are consistent with the nonparametric assumptions used in the wapm tests the average negative wapm deviation over the 70 farms was 0 20 indicating that on average these farms could have selected available netput vectors that would have increased profits by 20 of total receipts a tobit regression showed that the available characteristics on these farms explained very little of the variability in their abilities to select the best netput vectors yet increased age and additional education increased the ability to select the best netput vector

too much investment a problem of asymmetric information this paper shows that under plausible assumptions the inability of lenders to discover all of the relevant characteristics of borrowers results in investment in excess of the socially efficient level raising the rate of interest above the free market level will restore optimality this conflicts with generally held views and is contrasted with the stiglitz weiss model it is shown that the assumptions which yield overinvestment support debt as the equilibrium method of finance however under the stiglitz weiss assumptions used to derive an underinvestment result equity is shown to be the equilibrium method of finance

jobs and agricultural policy impact of the common agricultural policy on eu agricultural employment abstract this paper investigates the relationship between eu agricultural subsidies and the outflow of labor from agriculture we use more representative subsidy indicators and a wider coverage panel data from 210 eu regions over the period 2004 2014 than has been used before the data allow to better correct for sample selection bias than previous empirical studies we find that on average cap subsidies reduce the outflow of labor from agriculture but the effect is almost entirely due to decoupled pillar i payments coupled pillar i payments have no impact on reducing labor outflow from agriculture i e on preserving jobs in agriculture the impact of pillar ii is mixed our estimates predict that an increase of 10 percent of the cap budget would prevent an extra 16 000 people from leaving the eu agriculture sector each year a 10 percent decoupling would save 13 000 agricultural jobs each year however the budgetary costs are large the estimated cost is more than 300 000 per year or more than 25 000 per month per job saved in agriculture

non parametric efficiency progress and regress measures for panel data methodological aspects this purely methodological paper deals with the role of time in non parametric efficiency analysis using both fdh and dea technologies it first shows how each observation in a panel can be characterized in efficiency terms vis a vis three different kinds of frontiers i contemporaneous ii sequential and iii intertemporal these are then compared with window analysis next frontier shifts outward and inward interpreted as progress or regress are considered for the two kinds of technologies and computational methods are described in detail for evaluating such shifts in either case these are also contrasted with what is measured by the malmquist productivity index finally an alternative way of identifying progress and regress independent of the frontier notion and referring instead to some benchmark notion is extended here to panel data

a nonparametric approach to expenditure constrained profit maximization a nonparametric approach to expenditure constrained profit maximization is developed a deterministic frontier profit function is constructed with and without expenditure constraints foregone profit is used as dual evidence for the existence of expenditure constraints individual evaluations on performance and expenditure constraints are produced empirical analysis is based on survey data for california rice farms seventeen of the eighty two surveyed farms experience profit loss as a result of expenditure constraints

risk credit constraints and financial efficiency in peruvian agriculture abstract based on a panel data set we use a two stage analysis to evaluate the effects of access to formal credit on financial efficiency of farms in northern peru the first stage uses non parametric data envelope analysis to estimate farm specific measures of financial efficiency 28 per cent of farmers are financially inefficient and credit constraints reduce profits of these farmers by an average of between 17 and 27 per cent the second stage uses tobit regression to evaluate the determinants of financial inefficiency the results point to uninsured risk as a key determinant of financial inefficiency and suggest that policies to strengthen agricultural insurance markets would likely pay large dividends in rural peru

impact of liquidity risk on variations in efficiency and productivity a panel gamma simulated maximum likelihood estimation abstract the objective of this study is to assess the importance of short and long run liquidity or debt risk on technical inefficiency and productivity an alternative panel estimator of normal gamma stochastic frontier model is proposed using a simulated maximum likelihood estimation technique empirical estimates indicate a difference in the parameter coefficients of gamma stochastic production function and heterogeneity function variables between the pooled and the swamy arora panel models the results from this study show short and long run risk or variations in liquidity or debt servicing ratio play an important role in explaining the variance in efficiency and productivity

cap reform modelling supply response subject to the land set aside abstract this paper uses duality theory to develop a model of european community agriculture the model is used to investigate the impact of the land set aside provision of the recent package of reforms of the common agricultural policy we assume that producers chose output and variable input levels that maximize difference between revenue and variable cost by including first order conditions for the allocation of land across its uses we impose that the observed allocations are profit maximizing allocations to overcome the problem of incorporating many outputs into an estimable production structure we imposed a priori the restriction that the technology was weakly separable in major categories of outputs with this restriction it was possible to model production decisions in stages using consistent aggregates in the latter stages

frontier production functions and technical efficiency a survey of empirical applications in agricultural economics abstract the modelling and estimation of frontier production functions has been an important area of econometric research during the last two decades forsund lovell and schmidt 1980 and schmidt 1986 present reviews of the concepts and models involved and cite some of the empirical applications which had appeared to their respective times of publication this paper seeks to update the econometric modelling of frontier production functions associated with the estimation of technical efficiency of individual firms a survey of empirical applications in agricultural economics is an important part of the paper

the stock market and innovative capability in the new economy the optical networking industry the purpose of this paper is to analyze the impact of the stock market on the innovative capabilities of high technology companies that have been central to what in the last half of the 1990s came to be called the new economy the empirical focus is on equipment suppliers in optical networking an industry that integrates the bandwidth potential of fiber optics with the data communications potential of the internet the study covers the period from 1996 to 2003 during which the optical networking industry was first central to the new economy boom and then from 2001 ensnared by the bursting of the new economy bubble this paper shows how responding to the new economy business model brought into the industry by cisco systems three old economy companies nortel networks lucent technologies and alcatel sought to use their corporate stock as a currency to acquire technology companies and compensate talented people and thus accumulate innovative capability to understand the relation between the stock market and innovative capability in the cisco growth through acquisition and integration model and in the creative responses of the old economy companies to the cisco challenge we apply an analytical framework that links four functions of the stock market control combination compensation and cash with three social conditions of innovative enterprise strategic control the abilities and incentives of strategic decision makers to allocate resources to uncertain investments in innovative capabilities organizational integration the structure of incentives that motivates employees to apply their skills and efforts to collective learning processes and financial commitment the availability to the enterprise of resources to sustain cumulative learning processes until by accessing markets they can generate financial returns using this framework we show that the ways in which the old economy companies used their stock to accumulate innovative capability in the new economy boom of 1998 2000 made them more vulnerable to the stock market collapse and the slowdown in the optical networking industry in 2001 2003

credit market imperfections and the distribution of policy rents this article shows that credit market imperfections have important implications for the distribution of policy rents in a model with land as fixed factor and credit market imperfections when an area payment is given land rents go up by more than the subsidy on aggregate farms may lose from the subsidy the results depend on the extent to which subsidies have direct and indirect effects on the credit constraints on whether farms rent or own land and on farm heterogeneity

the impact of decoupled payments on farm choices conceptual and methodological challenges abstract in this paper we review the methodological framework for analysing decoupled payments in models of agricultural production market and technological uncertainty farm efficiency credit constraints farm household choices involving extra agricultural decisions policy uncertainty and long run impact of decoupling on investment and land values are the relevant issues that should be pursued by methodological and empirical analysis future research should refine the analysis of decoupled payments mainly trying to provide results that can be useful for policy simulation to bridge the gap between analysis at the individual level and sector policy models

capturing the least costly way of reducing pollution a shadow price approach abstract the production analysis literature is increasingly concerned with estimating marginal abatement costs yet most studies do not emphasize the ways in which pollutants may be reduced and their costs which makes them unable to identify the least costly compliance strategy this paper utilizes the materials balance principle to relate pollution to the employment of material inputs a production model which allows input and output substitution downscaling of operations pollution control and emission permits purchases as compliance strategies is proposed and the implications of joint and non joint pollution controls for the trade off between pollutants and desirable outputs are considered marginal abatement costs reflecting the least costly way of compliance are derived by exploiting the duality between the directional distance function and the profit function

developments in biophysical and bioeconomic simulation of agricultural systems a review this paper reviews the features and uses of some recent biophysical and bioeconomic simulation models in agricultural economics research problems associated with earlier models are discussed and the extent to which recent simulators have addressed these concerns is appraised some salient factors that will enhance the continued relevance of simulators as research and decision support tools are indicated