the internal market and hospital efficiency a stochastic distance function approach the uk internal market was one of the first european attempts to introduce a competitive mechanism in the provision of hospital services the assumption was that competition would have led hospitals to increase efficiency in the use of their resources the aim of this paper is to analyse the effectiveness of this kind of reform by measuring the changes in technical efficiency of a panel of 52 acute scottish hospitals observed from 1991 92 to 1996 97 the time period covers the whole duration of the internal market and the sample contains a different mix of both trusts and non trusts where the former embed the proper working of the reform the selected model is a stochastic output distance function that includes an interaction dummy variable to allow for parameters to change over time the results show a structural break after which hospitals change not only the way in which they provide their services but also the kind of services they provide favouring the quicker treatment of patients on a day basis

a cost malmquist productivity index capturing group performance this paper develops an index for comparing the productivity of groups of operating units in cost terms when input prices are available in that sense it represents an extension of a similar index available in the literature for comparing groups of units in terms of technical productivity in the absence of input prices the index is decomposed to reveal the origins of differences in performance of the groups of units both in terms of technical and cost productivity the index and its decomposition are of value in contexts where the need arises to compare units which perform the same function but they can be grouped by virtue of the fact that they operate in different contexts as might for example arise in comparisons of water or gas transmission companies operating in different countries

efficiency in the factoring industry the efficiency and productivity in the italian factoring industry between 1993 and 1997 is investigated using dea the factoring industry is an important part of many financial systems and it has established itself as a major source of finance and credit management for a growing number of companies however as far as the authors are aware no studies have applied frontier methodologies to examine the efficiency and productivity of this industry this paper focuses on the italian market the second largest in the world after the uk the results suggest that there are substantial cost savings to be had in the italian factoring industry the mean cost inefficiency in the italian factoring industry over the period 1993 1997 ranged between 14 and 22 these inefficiencies are mainly generated by allocative rather than technical inefficiencies scale and technical inefficiencies seem to be similar in magnitude and the supposed importance of the latter typically found in the banking efficiency literature are n

a note on the malmquist productivity index in recent years the malmquist index has gained in popularity as a measure of productivity change we demonstrate that in the presence of non constant returns to scale the malmquist productivity index does not accurately measure productivity change the bias is systematic and depends on the magnitude of scale economies

bootstrapping the data envelopment analysis malmquist productivity index this paper presents a bootstrap approach to calculate confidence intervals for firm specific malmquist productivity indices obtained from data envelopment analysis dea models the bootstrap is easily implemented and allows identification of production units that have significant productivity changes an application using data from swedish eye care departments is included we find that 40 of departments have significant progress in productivity whereas only 10 of the departments have a significant regress in productivity this differs from the original results where about half the sample have estimates of progress and the other half have estimates of regress in productivity

convergence in oecd countries technical change efficiency and productivity the aim of this study is to analyse labour productivity convergence in the oecd countries over the period 1975 90 a nonparametric frontier approach is used to calculate the malmquist productivity index by breaking it down the contribution in the growth of labour productivity of technical progress of changes in efficiency and of the accumulation of inputs per worker are quantified unlike other studies the results obtained show that technical change has worked against labour productivity convergence since it has always been greater in the countries with higher labour productivity

competitor see competitor do incumbent entry in new market niches the ability to keep up with changing technology is critical for a company s long term survival however companies have to balance the risk of rushing into new areas and potentially cannibalizing their existing business against the risk of missing the emerging market this paper investigates when incumbents enter into new market niches created by technological innovation we argue that market conditions and company specific characteristics do not suffice to explain incumbents entry timing but that entry is a contagious process our results demonstrate that incumbents are more likely to respond to innovations in their industry when their counterparts do so in particular we show that incumbents are affected by the entry of firms that are similar in size and resources when a highly similar company enters the new market it raises the probability that the company enters itself beyond levels based solely on the attractiveness of the market

towards a testable model of entry a study of the us manufacturing industries this paper develops a simple model of firms entry decisions fits it to interindustry data and tests hypotheses related to contestability theory it is shown that entry increases with the profit level of incumbents holding fixed the expected losses that the entrant would suffer in the event of exit these expected losses are greater the higher the probability of a predatory incumbent response and the larger the sunk costs that must be committed by the entrant the effects of sunk costs are significant and incumbents are significantly more likely to react aggressively when they are both profitable and concentrated copyright 1990 by the london school of economics and political science

non convexities and the efficiency of equilibria in insurance markets with asymmetric information abstract the nature of the efficiency frontier in models with adverse selection has not been studied in the literature we show that this frontier cannot always be strictly concave we obtain however that there is always a one to one correspondence between market equilibrium and second best efficiency whatever the shape of the efficiency frontier the results are illustrated with an insurance example

the market evolution and sales takeoff of product innovations in contrast to the prevailing supply side explanation that price decreases are the key driver of a sales takeoff we argue that outward shifting supplyand demand curves lead to market takeoff our fundamental idea is that sales in new markets are initially low because the first commercialized forms of new innovations are primitive then as new firms enter actual and perceived product quality improves and prices possibly drop which leads to a takeoff in sales to provide empirical evidence for this explanation we explore the relationship between takeoff times price decreases and firm entry for a sample of consumer and industrial product innovations commercialized in the united states over the past 150 years based on a proportional hazards analysis of takeoff times we find that new firm entry dominates other factors in explaining observed sales takeoff times we interpret these results as supporting the idea that demand shifts during the early evolution of a new market due to nonprice factors is the key driver of a sales takeoff

total factor productivity and the convergence hypothesis in the italian regions this article is aimed at testing the catching up hypothesis for the italian regions the use of malmquist productivity indices allows to decompose productivity growth into technological progress and technical efficiency change interpreted respectively as innovation and catching up measurements the analysis leads to a conclusion that regional economies diverge at a decreasing rate

public and private inputs in aggregate production and growth a cross country efficiency approach in a cross section of oecd countries we replace the macroeconomic production function by a production possibility frontier total factor productivity being the composite effect of efficiency scores and possibility frontier changes we consider for the periods 1970 1980 1990 and 2000 one output gdp per worker and three inputs human capital public physical capital per worker and private physical capital per worker we use a semi parametric analysis computing malmquist productivity indexes and we also resort to stochastic frontier analysis results show that private capital is important for growth although public and human capital also contribute positively a governance indicator a nondiscretionary input explains inefficiency better governance helps countries to achieve a better performance nonparametric and parametric results coincide rather closely on the movements of the countries vis a vis the possibility frontier and on their relative distances to the frontier

non radial cost luenberger productivity indicator abstract this study decomposes cost inefficiency into technical and allocative components in a more general way based on the directional russell measure drm of fukuyama and weber 2009 with the allocative component being completely clear of technical inefficiency based on this decomposition we develop a cost oriented productivity indicator the cost luenberger productivity indicator cl which completely embraces the concept of cost minimization and provides four sources of productivity change technical efficiency change the change in allocative efficiency the shift of technology and the effect of input price change to illustrate the above decompositions of cost inefficiency and productivity change and to investigate whether the establishment of a financial holding company fhc offers a bank greater operating efficiency and an improvement in productivity change this study employs data on taiwan s banking industry covering the period 2006 2012

productivity and efficiency of us gas transmission companies a european regulatory perspective on both sides of the atlantic the regulation of gas transmission networks has undergone major changes since the early 1990s whereas in the us the long standing regime of cost plus regulation was complemented by increasing pipe to pipe competition most european countries moved towards incentive regulation complemented by market integration we study the productivity development of a panel of us interstate companies using data envelopment analysis and malmquist productivity indices results are presented for changes in productivity as well as for several convergence tests the results indicate that taking productivity and convergence as performance indicators regulation has been rather successful in particular during a period where overall demand was flat however we argue that a benchmarking based regulation might have brought about stronger convergence lessons for european regulators are twofold first the us analysis shows that benchmarking of european transmission operators would be possible if data were available second our results suggest that in the long run market integration and competition are alternatives to the current european model

productivity growth technical progress and efficiency in their comment subhash c ray and evangelia desli 1997 hereafter rd point out that the specification of the decomposition of the malmquist productivity index used by fare et al 1994 hereafter fgnz is not unique and propose and compute an alternative specification of that decomposition we will discuss additional decompositions at the end of this note but proceed here by comparing the rd decomposition with fgnz based on both conceptual and computational grounds rd provide a discussion of the overall malmquist productivity index including the important issue of when this index is equivalent to the traditional notion of total factor productivity tfp namely under the condition that the reference technology be consistent with constant returns to scale crs as they point out this will yield a measure of tfp even if the true underlying technology is not crs for example both rd and fgnz use the crs reference technology to compute overall malmquist productivity one of the key issues raised is the role of the underlying scale properties of the benchmark technologies used to define and compute both productivity and its components in particular two reference technologies are employed in both rd and fgnz what we refer to as crs and variable returns to scale vrs technologies by construction these technologies are nested the crs technology contains the vrs technology as in figure 1 in rd this nestedness provides the logical basis for our decomposition at a very intuitive level we would argue that these two benchmarks can be used to provide bounds on the underlying true but unknown technology 2 intuitively we see the vrs technology providing a type of convex inner approximation whereas the crs technology provides a type of convex outer approximation thus these two technologies provide alternative benchmarks they do not require that the data satisfy either crs or vrs another possible intuitive interpretation is that the crs captures a perhaps hypothetical long run and the vrs approximates the short run as a reference technology the crs technology has some very useful features for example it captures the notion of maximal

a simple tax structure for competitive equilibrium and redistribution in insurance markets with asymmetric information in their influential paper rothschild and stiglitz 6 demonstrated that the existence of nash equilibrium is not a general property of insurance markets when buyers have private information about their riskiness and firms face free entry and exit conditions this paper presents a simple and implementable system of taxes and subsidies applied to firms which permits a nash equilibrium always to exist we also show that more than one nash equilibrium is open to the regulator in particular government can effect risk discriminating redistribution without a priori knowledge of any individual buyer s riskiness hence it is not the case that the inability to distinguish between types of buyers rules out compensation risk discriminating transfers even in principle as claimed by schmalensee 7 442 finally we show that even when a nash equilibrium exists without government intervention there are always alternative and under some circumstances pareto superior equilibria open to the regulator since these alternative equilibria entail cross subsidization from low risk to high risk buyers our results suggest that the well known cross subsidization enforced through current regulatory practices is consistent with economic efficiency we conclude that the informational asymmetry assumed by rothschild and stiglitz poses distinct efficiency and distribution problems as do more conventional non informational situations of market failure and that regulators can influence the allocation of insurance through conventional instruments of intervention without assuming dictatorial control of the market

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

agricultural productivity of the spanish regions a non parametric malmquist analysis productivity growth for the agricultural sectors of the 17 spanish regions over the period 1977 88 is studied using non parametric programming techniques productivity changes based on conventional inputs are linked to other economic geographic and institutional issues average technical change in the spanish regions grew at an annual rate of 2 9 but with great regional variation this paper presents a clear characterization of areas with greater technical progress and the regions with technical regress

bargaining powers and market segmentation in freight transport the heterogeneity of services in the freight transport market and the presence of imperfect information motivate the development of an empirical model for detecting market imperfection and bargaining powers of the two agents concluding a contract the fact that agents typically bargain simultaneously on price and attributes leads to models without exogeneity assumption the model is accordingly based on estimation of the support of the joint distribution of the price and of the attributes of the transport rather than on expectation of the price conditional to the attributes the model proposes an innovative and integrated approach for measuring market imperfection and bargaining powers furthermore the paper examines the sensitivity of the results to the choice of attributes and in order to detect potential market segmentation to selection of the data the empirical work is based on a new dataset obtained from a survey based on face to face interviews providing data on the price and qualitative attributes of a set of actual contracts negotiated on the belgian freight market copyright c 2007 john wiley sons ltd

the efficiency of competitive equilibria in insurance markets with asymmetric information abstract this paper addresses the relationship between competitive equilibria and efficient allocations in an insurance market with asymmetric information using the definition of second best efficiency proposed by harris and townsend 1981 for environments characterized by informational assmmetry the efficiency properties of several proposed market equilibria are examined we find an analogue to the first optimality theorem a miyazaki wilson equilibrium always results in a second best allocation

innovation diversity and diffusion a self organisation model a number of features of innovation diffusion are identified appropriability diversity expectations selection learning and spillover externalities a dynamic model is formul ated to embed the diffusion question into a more general framework of disequilibrium competition the model incorporates distinct vintage structures reflecting a change in technological trajectory learning by using a nd expectations driven investment rules of thumb simulation studies reveal robust quasi logistic curves but a complicated pattern of net market share gains and losses uncertainty regarding the rationality of early or late adoption it is argued ensures that the requisite behavioral variety is present to generate these diffusion patterns copyright 1988 by royal economic society

are hospitals seasonally inefficient evidence from washington state efficiency measurement has been one of the most extensively explored areas of health services research over the past two decades despite this attention few studies have examined whether a provider s efficiency varies on a monthly quarterly or other sub annual basis this article presents an empirical study that looks for evidence of seasonal inefficiency using a quarterly panel of general acute care hospitals from washington state we find that hospital efficiency does vary over time however the nature of this dynamic inefficiency depends on the type of efficiency being measured our results suggest that technical and cost efficiency vary by quarter allocative and scale efficiency also vary on a quarterly basis but only if the data are jointly disaggregated by quarter and another firm specific factor such as size or operating status thus future research corporate decisions and government policies designed to improve the efficiency of hospital care need to account for seasonal trends in hospi

market concentration measurement administrative monopoly effect and efficiency improvement empirical data from china civil aviation industry 2001 2015 china s civil aviation transportation industry is a natural monopoly industry field and the effect of administrative monopoly is obviously this paper uses absolute market concentration crn and

technological change efficiency gains and capital accumulation in labour productivity growth and convergence an application to the spanish regions the main objective of this article is to analyse labour productivity growth and convergence in the spanish regions between 1965 and 1995 decomposing total factor productivity gains into technological progress and efficiency change by means of malmquist productivity indices on the basis of this decomposition labour productivity growth is broken down into components attributable to technological change shifts in the frontier efficiency gains movements toward the frontier and capital accumulation movements along the frontier the approach followed in this study is based on work initiated by fare et al where a link between the economic growth and convergence literature and the production frontier approach was established furthermore in the spirit of quah s approach the evolution of the whole distribution is considered thus the analysis of the dynamics of the entire distribution of labour productivity and the factors behind it technological progress efficiency gains and capital accumulation

malmquist productivity index decompositions a unifying framework in two widely cited but unpublished working papers simar and wilson 1998 and zofio and lovell 1998 proposed an alternative decomposition of the malmquist productivity index which retained what seemed to be the strongholds of previous proposals with regard to the contribution of technological and efficiency change to productivity change namely a technical change term with regard to the best practice variable returns to scale vrs technology which is to be found in ray and desli 1997 and a scale efficiency change term that illustrates a firm s situation with regard to optimal scale benchmark technology fare et al 1994 attaining this objective required the introduction of an additional term in the malmquist productivity index decomposition which would reflect the scale bias of technical change it is our objective to provide economic rationale for this term within a theory of production context the existing decompositions and recent articles that further elaborate on this issue the ide

measuring hospital efficiency with frontier cost functions this paper uses a stochastic frontier multiproduct cost function to derive hospital specific measures of inefficiency the cost function includes direct measures of illness severity output quality and patient outcomes to reduce the likelihood that the inefficiency estimates are capturing unmeasured differences in hospital outputs models are estimated using data from the aha annual survey medicare hospital cost reports and medpar we explicitly test the assumption of output endogeneity and reject it in this application we conclude that inefficiency accounts for 13 6 percent of total hospital costs this estimate is robust with respect to model specification and approaches to pooling data across distinct groups of hospitals

production with storable and durable inputs nonparametric analysis of intertemporal efficiency abstract we propose a nonparametric methodology for intertemporal production analysis that accounts for durable as well as storable inputs durable inputs contribute to the production outputs in multiple consecutive periods storable inputs are non durable and can be stored in inventories for use in future periods we explicitly model the possibility that firms use several vintages of the durable inputs i e they invest in new durables and scrap older durables over time furthermore we allow for production delays of durable inputs and storage costs for storable inputs we characterize production behavior that is dynamically cost efficient which allows us to evaluate the efficiency of observed production decisions for cost inefficient behavior we propose a measure to quantify the degree of inefficiency an attractive feature of this measure is that it can be decomposed in period specific cost inefficiencies we demonstrate the usefulness of our methodology through an application to the italian manufacturing sector of fabricated metal products over the period 1995 2007 drawn from the amadeus dataset

malmquist indices of productivity change in the uk gas industry before and after privatization the uk government s privatization programme was justified in terms of potential efficiency gains this paper concentrates on measures of technical efficiency in the regions of the uk natural gas industry before and after privatization and the associated regulatory changes it uses non parametric frontier analysis and malmquist indices to show that the rate of productivity growth increased significantly after privatization however the differences in technical efficiency amongst regions remain suggesting that failure to break up the industry has sacrificed potential gains from direct competition or indirect competition through yardstick regulation

decarbonising the power sector via technological change differing contributions from heterogeneous firms abstract in the power sector technological change is a key lever to address the decarbonisation needed to avoid dangerous climate change policy makers aim to accelerate and redirect technological change by targeting relevant firms via climate policy e g the european union emissions trading system eu ets and climate relevant technology policies e g feed in tariffs changes in firm s behaviour i e their research and development r d as well as diffusion activities are at the heart of technological change however firms are heterogeneous actors with varying attributes which perceive policy differently hence they can be expected to react very heterogeneously to these new policies based on an original dataset of 201 firms we perform a cluster analysis grouping firms along their r d and diffusion activity changes we then compare these clusters with regards to the characteristics of the contained firms our analysis results in seven clusters showing very diverse contributions to low carbon technological change suggesting potential for policy to become more effective a comparison of the firms characteristics allows us to derive indicative recommendations on how to adjust the policy mix in order to induce contributions from most firms in the power sector

estimating most productive scale size using data envelopment analysis abstract the relation between the most productive scale size mpss for paparticular input and output mixes and returns to scale for multiple inputs multiple outputs situations is explicitly developed this relation is then employed to extend the applications of data envelopment analysis dea introduced by charnes cooper and rhodes ccr to the estimation of most productive scale sizes for convex production possibility sets it is then shown that in addition to productive inefficiencies at the actual scale size the ccr efficiency measure also reflects any inefficiencies due to divergence from the most productive scale size two illustrations of the practical applications of these results to the estimation of most productive scale sizes and returns to scale for hospitals and stem electric generation plants are also provided emphasize the advantage of this method in examining specific segments of the efficient production surface

productivity growth in east asia a reappraisal in recent years there has been considerable disagreement over the extent to which productivity growth has accounted for the success of the east asian economies empirical evidence based on forms of growth accounting or direct estimation of a production function is inconclusive so that the debate appears to be at a stalemate this article applies an alternative approach using the malmquist productivity indices to investigate the contribution of productivity to the longer term growth the results support the view that over the longer term the east asian economies were input driven but interesting differences arise between countries when shorter periods are analysed

aggregation of malmquist productivity indexes allowing for reallocation of resources in this paper we consider aggregate malmquist productivity index measures which allow inputs to be reallocated within the group when in output orientation this merges the single period aggregation results allowing input reallocation of nesterenko and zelenyuk 2007 with the aggregate malmquist productivity index results of zelenyuk 2006 to determine aggregate malmquist productivity indexes that are justified by economic theory consistent with previous aggregation results and which maintain analogous decompositions to the original measures such measures are of direct relevance to firms or countries who have merged making input reallocation possible allowing them to measure potential productivity gains and how these have been realised or not over time

co2 emissions reduction of chinese light manufacturing industries a novel ram based global malmquist luenberger productivity index climate change has become one of the most challenging issues facing the world chinese government has realized the importance of energy conservation and prevention of the climate changes for sustainable development of china s economy and set targets for co2 emissions reduction in china in china industry contributes 84 2 of the total co2 emissions especially manufacturing industries data envelopment analysis dea and malmquist productivity mp index are the widely used mathematical techniques to address the relative efficiency and productivity of a group of homogenous decision making units e g industries or countries however in many real applications especially those related to energy efficiency there are often undesirable outputs e g the pollutions waste and co2 emissions which are produced inevitably with desirable outputs in the production this paper introduces a novel malmquist luenberger productivity mlp index based on directional distance function ddf to address the issue of productivity evolution of dmus in the presence of undesirable outputs the new ram range adjusted measure based global mlp index has been applied to evaluate co2 emissions reduction in chinese light manufacturing industries recommendations for policy makers have been discussed

assessing productivity changes in uk hospitals reflecting technology and input prices in this study malmquist productivity indexes are used to evaluate the performance of acute hospitals in the uk over the period after the introduction of the internal market in the national health service in 1991 the indexes are computed using nonparametric programming known as data envelopment analysis and they are decomposed into multiple component measures to give insights into the trends in hospital performance overall it is found that productivity regressed in the year after the reforms but progressed thereafter so that overall there was a net progress both as far as the inputs and costs are concerned productivity progress is mainly due to overall efficiency progress which in turn is mostly attributed to allocative efficiency improvements technical change resulted in a small reduction in the amount of inputs used but also at higher production costs because of a worsening in the match between input mixes and relative input prices however it is suggested that the gains in productivity are not

embodied knowledge and sectoral linkages an input output approach to the interaction of high and low tech industries abstract this paper considers the measurement of the direct and indirect flows of knowledge between different technology intensive industries in france germany norway sweden and the united states using the oecd input output database and the anberd database we show that product embodied knowledge accounts for about half of total technology use on average but with a substantial variation between industries we then develop a general two sector linkage measure that allows us to examine the interaction between predominantly technology producing industries generally high tech and predominantly technology using industries generally low tech this study shows that the medium high and medium low tech industries identified as specialized supplier and scale intensive industries including knowledge intensive business services kibs are essential for the production diffusion and use of technology and hence for economic growth

an analysis of the efficiency of the oil refining industry in the oecd countries abstract this study investigated the efficiency of the oil refining industry using the two stage method of markowitz portfolio optimization theory and panel data analysis of about 30 oecd countries from 2005 to 2016 which is a new methodology for measuring the efficiency of the oil industry the oil refining industry s efficiency is derived from the prices of petroleum products naphtha gasoline kerosene diesel and fuel oil using the portfolio theory the panel data was constructed using the following dependent variables the crude oil production efficiency energy consumption renewable energy consumption and r d investment using the panel data analysis empirical analyzes are conducted on how the efficiency of the oil refining industry is affected by explanatory variables the results show that crude oil production and energy use in oecd countries have a negative effect on the efficiency of the oil refining industry and consumption of renewable energy and r d investment have a positive effect contrary to conventional perception the petroleum industry can coexist with the renewable energy industry for sustainable development

the generalized malmquist index and capacity utilization change an application to the italian manufacturing 1989 1994 several indices of plant capacity utilization based on the concept of best practice frontier have been proposed in the literature fare et al 1992 de borger and kerstens 1998 this paper suggests an alternative measure of capacity utilization change based on generalized malmquist index proposed by grifell tatje and lovell in 1998 the advantage of this specification is that it allows the measurement of productivity growth ignoring the nature of scale economies afterwards this index is used to measure capacity change of a panel of italian firms over the period 1989 94 using data envelopment analysis and then its abilities of explaining the short run movements of output are assessed

modelling entrepreneurship unifying the equilibrium and entry exit approach two approaches can be distinguished with respect to modelling entrepreneurship i the approach focusing on the net development of the number of entrepreneurs in an equilibrium framework and ii the approach focusing on the entries and exits of entrepreneurs in this paper we unify these approaches to arrive at a model explaining the equilibrium and actual number of entrepreneurs and the entry and exit rate of entrepreneurs simultaneously and consistently we apply our unified approach to the netherlands using self employment data for the 1960 1999 period we find error correction of about 20 per year and a very different situation in terms of disequilibrium before and after the early 1980s periods of high unemployment appear to be characterized by both high entry and high exit rates

a cost malmquist productivity index this paper develops a productivity index applicable when producers are cost minimisers and input prices are known the index is inspired by the malmquist index as extended to productivity measurement the index developed here is defined in terms of input cost rather than input quantity distance functions hence productivity change is decomposed into overall efficiency and cost technical change furthermore overall efficiency change is decomposed into technical and allocative efficiency change and cost technical change into a part capturing shifts of input quantities and shifts of relative input prices these decompositions provide a clearer picture of the root sources of productivity change they are illustrated here in a sample of hospitals results are computed using non parametric mathematical programming 2003 elsevier b v all rights reserved

measurement of hospital efficiency using a latent class stochastic frontier model this article analyses the technical efficiency of portuguese hospitals from 1997 to 2008 with the latent class frontier model enabling the identification of different segments in the cost frontier it is found that there are three statistically significant segments in the sample leading to the conclusion that no common health policy can be applicable to all the hospitals analysed calling rather for policies conceived for each hospital segment identified the health policy based in the identified segments enables a more accurate and cost effective management of resources

on two definitions of productivity abstract caves et al in 1982 introduced a productivity measure that does not proceed from a continuous timer presentation they named these indexes after sten malmquist who in 1953 used ratios of distance functions to formulate quantity indexes in the consumer context in a later paper diewert proposed an alternative definition of productivity also based on distance functions which he attributed to hicks and moorsteen in this letter we provide necessary and sufficient conditions for the malmquist productivity index to equal the hicks moorsteen index

total factor productivity growth technological progress and technical efficiency change dimensions of productivity change in yugoslavia 1965 1978 this article total factor productivity growth technological progress and technical efficiency change dimensions of productivity change in yugoslavia 1965 78 was reprinted with permission from the december 1982 issue of the economic journal this article proposes a methodology that decomposes total factor productivity change into two distinct elements technological progress and changes in technical efficiency technological progress is defined as the change in the best practice production frontier all other productivity change is attributed to technical efficiency change the article provides a theoretical framework for decomposing total factor productivity growth as well as a specification and estimation of the deterministic frontier production function it employs a programming technique to estimate a flexible functional form of the production frontier the paper then applies this technique to empirical data from yugoslavia of the period from 1965 to 1978 it concludes that for yugoslavia improvements to technical efficiency comprise the dominant contribution to total factor productivity change this agrees with accumulating evidence that in many developing economies productivity gain due to technological mastery of imported technology is substantial

entry and exit on the competitive fringe microeconomic theories of industry evolution reserve key roles for the entry and exit of firms competitive models of industry supply often assume that individual firms have ushaped long run average cost curves in consequence an industry s output adjustment in movement from one long run equilibrium to another is entirely accomplished through the entry and exit of firms rather than through changes in long run equilibrium output of individual firms in empirical applications the speed of movement to new equilibrium levels of output and price measured by the time it takes for profits to return to competitive levels following a demand shock clearly depends upon the ease of entry and exit however the simplest competitive models have a clear theoretical weakness abundant evidence against u shaped long run average cost curves precludes a simple identification of entry with industry expansion and exit with industry contraction expansion of industry supply can be met either by incumbents or entrants and we have little empirical evidence of the division entry conditions are also a staple of oligopoly and monopoly models potential entry constrains the pricing options open to industry leaders and actual entry of new firms and new products erodes at varying rates the market power of incumbent firms if actual entry responds rapidly to profit opportunities then the persistent exercise of monopoly power will be rare however analyses of monopoly and oligopoly models typically approach entry indirectly by inferring that persistent profit differentials reflect high barriers to entry there are few direct tests of the effects of such barriers on actual entry despite their importance very few empirical studies of entry and exit exist severe data limitations restrict both the number of studies and the scope of extant analyses the research reported in this paper provides measures of entry and exit in 46 food manufacturing industries during the 1976 82 period measures of incidence the number of firms as well as extent the size of firms are provided the analysis also distinguishes between diversified firms and specialist producers entry and exit rates vary considerably across industries and the paper reports the results of statistical analyses that account for industry differences in entry and exit rates by specialist firms

graph efficiency and productivity measures an application to us agriculture hyperbolic measures of efficiency and productivity change with respect to a graph representation of production technology allow researchers to consider output and input dimensions simultaneously in measuring producer performance hyperbolic efficiency measures have been proposed but empirical implementation has not followed either in efficiency analysis or in productivity analysis the objectives of this paper are to define hyperbolic performance measures on a graph representation of production technology to motivate their use by stating some of their advantages over their radial counterparts and to introduce a direct formulation to calculate them making use of data envelopment analysis techniques the ideas are illustrated by calculating hyperbolic efficiency and malmquist productivity indexes for a us agricultural panel data set

examining the drivers of total factor productivity change with an illustrative example of 14 eu countries abstract based on the different models developed by korhonen and luptacik korhonen p luptacik m 2004 eco efficiency analysis of power plants an extension of data envelopment analysis european journal of operational research 154 437 46 this contribution centers on the development of an intertemporal comparison in order to analyze eco efficiency change over time in this setup two model variants by korhonen and luptacik 2004 are used in order to provide deeper insights concerning the driving forces for the change in the eco efficiency which bias in technical change can be observed is it more input saving or pollution reducing for illustration purposes the proposed approach is used to analyze the performance of 14 countries of the european union for the period 1995 2004 an average eco productivity growth of 22 is observed the estimated contribution of improved use of input is 20 and that of reduced relation of greenhouse gas emissions is 23 therefore it is concluded that on average the eco productivity growth is more driven by improved environmental conditions

information acquisition and relative efficiency of competitive oligopoly and monopoly markets this paper analyzes the relative efficiency of a competitive equilibrium against cournot oligopoly and monopoly equilibria when firms have diverse private information about the stochastic market demand when firms have information of the same precision the competitive equilibrium yields a larger expected welfare however when information is costly cournot oligopoly and monopoly firms acquire more information and hence may yield a larger expected welfare than the competitive firms under certain conditions the author also finds that competitive firms acquire less than the efficient level of information while cournot oligopoly and monopoly firms may acquire more than the efficient level copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

dominant firms and their alleged decline abstract by way of a survey of recent literature on the theory of strategic competition this paper focuses on the question of whether dominant firms decline the traditional argument suggesting decline is found to be based on a rather unsatisfactory modelling of dominance and more acceptable conceptualizations suggest that such privileged positions will persist

the malmquist total factor productivity index the definitions of the malmquist output and input quantity indexes specified by d w caves l r christensen and w e diewert 1982 are applied in this study based on these indexes a malmquist total factor productivity index is derived for general production structures the definition maintains the fundamental characteristic of a productivity index as a ratio between an output quantity change index and an input quantity change index this index provides a remedy for the shortcoming of the traditional definition of the malmquist productivity index in that the latter does not correctly measure changes in productivity in the presence of changes in returns to scale copyright 1996 by the editors of the scandinavian journal of economics

malmquist productivity indexes and fisher ideal indexes comment fare and grosskopf i992 henceforth abbreviated as fg showed that under some conditions the productivity index defined as the geometric mean of two input based malmquist productivity indexes is equal to the quotient of the fisher input quantity index and the fisher output quantity index both fisher indices can be computed from observed prices and quantities these conditions appear to be so strong that they will almost certainly never be fulfilled in practice this is shown by a careful inspection of fg s proof however under slightly milder but more plausible conditions it can be shown that the quotient of the fisher input index and the fisher output index is a reasonable approximation of the productivity index consider a firm at two time periods t o i with different technologies which are modelled by the input correspondences lt y x x can produce y x c rn yce rm it is assumed that the sets lt y are closed and convex and that inputs are strongly disposable the vectors x yt wt pt t o i denote observed inputs observed outputs observed input prices and observed output prices respectively the productivity index is defined as

price regulation in insurance markets with asymmetric information abstract the paper presents and discusses a regulatory policy in insurance markets it is based upon a two sided rule each company must propose at least one contract with full coverage and a ceiling is imposed on the level of premiums

productivity and technical change the case of taiwan this paper analyses productivity growth in 16 of taiwan s manufacturing industries during the period 1978 1992 the non parametric data envelopment analysis approach is used to compute malmquist productivity indexes these are decomposed into efficiency change and technical change the latter is further decomposed into an output bias an input bias and a magnitude component in addition the direction of input bias is identified empirical results indicate that the sector s tfp increased at a rate of 2 89 per annum which could be ascribed to a technical progress 2 56 and an efficiency improvement 0 33

the lechatelier principle in a dea model abstract this paper aims to relate the lechatelier principle first introduced into economics by samuelson 1947 with the dea approach through two propositions these propositions allow for bridging the principle over a dea model with and without the presence of non discretionary inputs and enable one to make comparisons for the various efficiency measures under different conditions the quasi fixity of some inputs hinders a firm s capacity from instantly and freely adjusting its input combination in order to minimize its production costs the assumption that all inputs are discretionary tends to exaggerate managers ability to dispense resources and renders invalid information on the adjustment of the current input mix

the life cycle of the u s tire industry 1 introduction a recent literature has emerged focusing on industry evolution or the dynamic patterns that industries and firms follow as they systematically evolve over time this literature is important because of the insights provided about how industries change why they change and the consequences of industrial change the year 1982 saw three fundamental contributions made to the research on the evolution of industry boyan jovanovic published the first formal model of industry evolution richard nelson and sidney winter presented their influential book on the causes and effects of this phenomenon and michael gort and steven klepper published their careful analysis of the stages of the product life cycle knowledge concerning industry dynamics and industry evolution has expanded since then despite this progress in the field of industry evolution considerable gaps remain for example we lack an adequate empirical understanding of the evolutionary process at the single industry level from the early to the late stages of its life cycle shakeouts have been identified in the literature as an integral component of this evolutionary process the sudden disappearance of large numbers of firms have been documented across a broad spectrum of industries such as steel airline carriers financial intermediaries automobiles and tires an important strand in the literature argues that the catalyst for these shakeouts is the introduction of a new dominant innovation confronted by a new technology introduced by a competitor the inability of other firms to adopt this new dominant technology presumably forces them out of the market jovanovic and macdonald 1994 made a pioneering and parsimonious contribution in this field of research by explaining patterns of number of firms output and prices of the u s tire industry despite the importance of their contribution we argue that their model does not adequately describe the key historic developments that have taken place in this or many other industries that faced a shakeout of producers 2 the domain of relevance of the jovanovic macdonald model is limited it assumes that one innovation followed by just one refinement is responsible for the nonmonotonicity in firm numbers this implies that the model is applicable only for those industries having experienced just two technologies in their entire history an initial low tech and a subsequent high tech phase most industries including the automobile tire industry that was the testing ground of jovanovic and macdonald have an ongoing history of significant improvements in product quality and productivity it seldom occurs that one innovation is dominant this is certainly true for the tire industry nelson 1987 in his study on the u s tire industry observed that there was no single technical breakthrough that unlocked the industry s potential for highspeed production nor was any individual or firm of overriding importance the advent of mass production was a cumulative process resulting from a vast number of successive small changes pp 331 2 italics added almost half a century ago reynolds 1938 p 463 described a similar process the great improvement in tire quality during the past 30 years is undoubtedly due to constant repetition of the cycle of invention and imitation we take a different approach than jovanovic and macdonald and explain the nonmonitonicity in firm numbers as resulting from gradual unit cost reduction over time leading to declining profit margins in the present paper we relate this cumulative process to the concept of learning by doing we will test the model using data of the american tire industry we do this to facilitate the comparison between our model and that of jovanovic and macdonald and because this industry is one of the few for which data are available for a long time period the process of learning by doing leading to decreasing marginal costs over time has an important impact on the number of firms in the industry

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

sensitivity analysis for dea models an empirical example using public vs nfp hospitals abstract the research presented here applies the data envelopment analysis dea to a sample of public government owned and not for profit hospitals operating in michigan in 1982 the focus of this research is twofold first assessing the relative efficiency between these two ownership types using the dea rather than cost or profit functions can add insights into the production practices of these two ownership forms of hospitals second testing the sensitivity of the dea will add credence to this approach and resulting measures ten different specifications of the dea are employed to test the sensitivity of the model

cost revenue and profit efficiency measurement in dea a directional distance function approach abstract estimation of efficiency of firms in a non competitive market characterized by heterogeneous inputs and outputs along with their varying prices is questionable when factor based technology sets are used in data envelopment analysis dea in this scenario a value based technology becomes an appropriate reference technology against which efficiency can be assessed in this contribution the value based models of tone 2002 are extended in a directional dea set up to develop new directional cost and revenue based measures of efficiency which are then decomposed into their respective directional value based technical and allocative efficiencies these new directional value based measures are more general and include the existing value based measures as special cases these measures satisfy several desirable properties of an ideal efficiency measure these new measures are advantageous over the existing ones in terms of 1 their ability to satisfy the most important property of translation invariance 2 choices over the use of suitable direction vectors in handling negative data and 3 flexibility in providing the decision makers with the option of specifying preferable direction vectors to incorporate their preferences finally under the condition of no prior unit price information a directional value based measure of profit inefficiency is developed for firms whose underlying objectives are profit maximization for an illustrative empirical application our new measures are applied to a real life data set of 50 us banks to draw inferences about the production correspondence of banking industry