Jeff Gow, Rezwanul Hasan Rana, Daniel Moscovici, Adeline Alonso Ugaglia, Lionel Valenzuela, Radu Mihailescu and Robert Coelli
There has been increasing consumer interest in recent times in the environmental providence of what they eat and drink. A number of different environmental wine certifications…
Abstract
Purpose
There has been increasing consumer interest in recent times in the environmental providence of what they eat and drink. A number of different environmental wine certifications have been created and these include biodynamic, fairtrade, organic, natural and sustainable. The purpose of this study is to survey wine consumers in Australia about their interest in these eco-certifications and their willingness to pay (WTP) a price premium for wine with one of these eco-certifications.
Design/methodology/approach
An online survey was developed to capture the knowledge and attitudes of consumers and their socio-demographic characteristics about their WTP for eco-certified wine. Data from 454 wine consumers in Australia were collected and analysed. Descriptive statistics and Pearson’s chi-squared test analysed the significant factors which determine consumers’ attitudes towards eco-certified wines. Ordinal logistic regression with marginal effects was used to examine whether the WTP a premium for different certified wines differs significantly based on wine knowledge, attitudes and socio-demographic characteristics.
Findings
The findings of this study indicate that consumers often buy pro-environmental goods. The majority have a positive (greater than 0) WTP a premium for biodynamic, fairtrade, organic, natural and sustainable-labelled wines. The main factors influencing eco-certified wine purchase decisions by Australian consumers are previously bought eco-certified goods, previously bought eco-certified wine and respondent age. Income, education or previous wine knowledge did not positively influence WTP a price premium for eco-certified wines. Gender was not significant in the ordinal logistic regression.
Research limitations/implications
Most studies in the literature use stated preference experiments to elicit WTP and these are valuable exercises, as they can provide an indication of consumer preferences for potential certifications, before they have been introduced to the market. In this study, we used an ordinal dependent variable in the logistic regression instead of a continuous variable (because of data limitations). Using ordinal dependent variables provides information on the probability or likelihood of occurring an event.
Originality/value
The study results provide the first price premium indications that Australian consumers are willing to pay for eco-certified wines (other than organic).
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Kris Siddharthan, Melissa Ahern and Robert Rosenman
Estimates a total effects cost function using a national 1994 health maintenance organization (HMO) data set to examine and update findings related to HMO efficiency. The cost…
Abstract
Estimates a total effects cost function using a national 1994 health maintenance organization (HMO) data set to examine and update findings related to HMO efficiency. The cost function controls for ownership characteristics (profit status and ownership), size, enrollment diversity, regional location, product diversity, model type, payment characteristics, and years of operation. While not explicitly controlling for quality or acuity, measures of plan and enrollee diversity help control for acuity and quality. Results show that most of the difference in cost efficiency between HMOs is explained by factors specific to the HMO, including efficiencies of scale and scope, lower levels of Medicare patients, and efficient levels of capital. The study also shows that for‐profits are more efficient than non‐profits because they rely less on withhold pools to control costs. Limitations of the study include weak controls for quality of care, and limited data related to payment characteristics.
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Segun Thompson Bolarinwa and Abiodun Adewale Adegboye
The paper investigates the determinants of capital structure and the speed of adjustment of capital structure decisions of Nigerian firms.
Abstract
Purpose
The paper investigates the determinants of capital structure and the speed of adjustment of capital structure decisions of Nigerian firms.
Design/methodology/approach
The paper adopts three methods: difference GMM, system GMM and stochastic frontier analysis (SFA).
Findings
The empirical results show that firms' efficiency affects the capital structure decisions of Nigerian firms. At the same time, short-term debt has a higher speed of adjustment in the context of Nigerian firms. The roles of other control variables are established in the paper.
Social implications
Nigerian firms should adopt short-term debt in order to achieve their targeted debt levels. Managers of Nigerian firms are also advised to be more efficient in order to attract higher performance.
Originality/value
The paper is the first literature to measure the efficiency of firms using SFA method. Extant studies in the literature have neglected the determinant while four papers that adopt the determinant data envelope analysis (DEA) method. This is also the first study to document the speed of adjustment in capital structure decisions in the context of Nigerian firms.
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Robert Webb, Cormac Bryce and Duncan Watson
This paper aims to investigate the effect of UK building society demutualisation on levels of efficiency at the largest five commercial banks in the UK.
Abstract
Purpose
This paper aims to investigate the effect of UK building society demutualisation on levels of efficiency at the largest five commercial banks in the UK.
Design/methodology/approach
This research utilises data envelopment analysis (DEA) within a rarely adopted windows framework to analyse efficiency. The study also incorporates a novel risk proxy in the profit‐orientated approach to determine DEA input/output which proves a useful innovation to the methodology.
Findings
The overall aggregate results suggest that converting building societies outperformed their bank counterparts in all areas of efficiency and that scale efficiency dominates pure technical efficiency. Interestingly, the results also indicate that the level at which institutions continue to find economies of scale had increased when compared to previous research.
Originality/value
The period of building society demutualisation offers an empirical opportunity to examine deregulation upon market participants. It is felt that this study offers academics, regulators and participants within the financial services environment an insight into the efficiency impact of deregulation.
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Kevin Duncan, Peter Philips and Mark Prus
The aim of this paper is to use stochastic frontier regression to measure the effect of the introduction and expansion of prevailing wage requirements on the cost efficiency of…
Abstract
Purpose
The aim of this paper is to use stochastic frontier regression to measure the effect of the introduction and expansion of prevailing wage requirements on the cost efficiency of public school construction in British Columbia. The results provide evidence from a specific sector and location that contributes to the accumulated evidence on the topic.
Design/methodology/approach
Stochastic frontier regression is used to measure the effect of the introduction and expansion of prevailing wage requirements on the cost efficiency of public school construction in British Columbia. The results of a likelihood ratio test indicate that stochastic frontier regression is preferred to OLS cost estimation because of the presence of statistically different cost inefficiencies across a sample of covered and uncovered projects.
Findings
Specifically, projects covered by the introductory stage of the wage requirements are significantly less cost efficient compared to other public school projects. However, by the time of the expansion of the wage policy 17 months later, covered projects were no more cost inefficient than other projects. The results indicate that if prevailing wage laws are associated with changes in the cost efficiency of construction, stochastic frontier regression is the preferred estimation technique.
Research limitations/implications
This is the first study of its kind with results specific to school construction in British Columbia. Further research based on data from other projects may/may not confirm the existence of differences in construction cost inefficiencies for projects covered by construction wage policies.
Social implications
By implication, the results suggest that if the cost inefficiency of prevailing wage laws is short‐lived, the impact on the total cost of construction may similarly be ephemeral. The results imply that prevailing wage regulations do not contribute to long‐run construction cost inefficiency.
Originality/value
This is the first study to use stochastic frontier regression to examine the cost inefficiencies associated with prevailing wage laws. Previous studies that examine the effect of the wage policy on construction costs are based on OLS estimation.
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Lorena Androutsou and Theodore Metaxas
Under the Directive 2011/24/EU, medical tourism and cross-border health are interrelated terms regarding the freedom to move to get the most accessible medical treatment into EU…
Abstract
Purpose
Under the Directive 2011/24/EU, medical tourism and cross-border health are interrelated terms regarding the freedom to move to get the most accessible medical treatment into EU Member State within the defined procedures for reimbursement. Little known empirically regarding the efficiency of the cross-border health/medical tourism industry. This study aims to measure its efficiency in Europe for the years 2010-2014, by using Data Envelopment Analysis (DEA).
Design/methodology/approach
Data obtained from OECD and the European Core Health Indicators (ECHI), which is collecting the data through Eurostat. Eurostat collects data on health-care activities and provides data on hospital discharges, including the hospital discharges of non-residents and these include hospital discharges of in-patients and day care patients. The analysis uses “DEA.P, 2.1 for windows” by Coelli (1996).
Findings
The results show that the Members States health systems were very efficient in handling non-residents in-patients; however, when managing day cases/outpatients, the efficiency scores dropped.
Practical implications
The findings would have significant associations affecting intentions to revisit clinics and the destination country. In addition, will be useful to those seeking a better understanding of the cross-border health and medical tourism industry efficiency.
Originality/value
Extending the findings of the European Commission report (2015c) by examining how well medical tourists are informed about the decision they are making, would be of perceived value. These are important indicators at European level by helping each Member State to measure its medical tourism services.
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Lakshmi Kumar, D. Malathy and L.S. Ganesh
The purpose of this paper is to understand the influence of technology change in the banking sector by employing data envelopment analysis (DEA) and also to determine the change…
Abstract
Purpose
The purpose of this paper is to understand the influence of technology change in the banking sector by employing data envelopment analysis (DEA) and also to determine the change in total factor productivity (TFP) and its components, namely technical change and technical efficiency change.
Design/methodology/approach
The DEA method has been used to assess the efficiency of the entire banking sector and the bank groups. The purpose has been to investigate TFP change and its components' (obtained using Malmquist index) influence on the growth in the banking sector as well as in the four bank groups. In doing so, for each bank group the levels of technical efficiency, technical efficiency change, efficiency change and TFP change have been estimated. Further investigation has been done to determine if significant differences in these exist between the different bank groups in terms of size, time period and ownership. The determinants of productivity have been assessed.
Findings
The TFP growth over the entire period (1995‐2006) was driven by technical change as compared to efficiency change, showing that technology and innovation had a greater impact than efficiency change, or the catch‐up effect. The fixed effects estimates of the determinants of TFP change and its components show that size, ownership and time period exert significant effect on technical change.
Practical implications
The results of the analysis presented in this paper suggest that policies that result in efficiency change are likely to have little impact on the future prospects of the banking sector relative to policies that foster the adoption of the latest technologies. This has exactly been the focus of Reserve Bank of India and though some banks may consider it as an imposition of technology, the result of this requirement appears to be positive as is apparent from this paper's analysis.
Originality/value
The value of this paper comes from the empirical testing that in the Indian banking sector growth in the more recent period came from technology change or frontier shifts as compared to efficiency change. Also, growth is larger due to frontier shifts than due to efficiency change. This endorses Lucas' findings regarding the focus on the positive impacts of deregulation and competition in the Indian banking sector.
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Wantao Yu and Ramakrishnan Ramanathan
The paper's aim is to assess performance of firms in the UK retail sector.
Abstract
Purpose
The paper's aim is to assess performance of firms in the UK retail sector.
Design/methodology/approach
Economic efficiencies of 41 retail companies working in the UK between 2000 and 2005 are examined in this study using three related methodologies: data envelopment analysis (DEA), Malmquist productivity index (MPI), a bootstrapped Tobit regression model. DEA is used to calculate technical and scale efficiencies of companies. Two outputs (turnover, profit before taxation) and three inputs (total assets, shareholders funds, and number of employees) are employed for the efficiency measurement. MPI is used to analyze the patterns of efficiency change over the six year period 2000‐2005. DEA efficiencies are then used to test important hypotheses on the impact of environmental variables, namely head office location, type of ownership, years of incorporation, legal form and retail characteristic, on the functioning of the UK retail sector using bootstrapped Tobit regression.
Findings
DEA analysis has shown that only ten retail companies are considered as efficient under CRS assumption, and 16 firms under VRS assumption in 2005. MPI results have indicated that about 50 percent of retail companies have registered progress in terms of MPI during 2000 and 2005. Twenty out of 41 retail companies have adopted advanced and efficient retailing technologies during this period. Three environmental variables, namely the type of ownership, legal form and retail characteristic, have been found to play significant roles influencing retail efficiency using bootstrapped Tobit regression.
Research limitations/implications
Data availability has limited the level of analysis in some parts of this study, especially in the bootstrapped Tobit regression.
Originality/value
This study seems to be the first in applying productivity analysis using DEA for the UK retail sector.
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This research tries to fill a gap in research and to suggest a rigorous quantitative approach to benchmarking marketing productivity. Data envelopment analysis (DEA) is useful in…
Abstract
Purpose
This research tries to fill a gap in research and to suggest a rigorous quantitative approach to benchmarking marketing productivity. Data envelopment analysis (DEA) is useful in identifying the best‐performing units to be benchmarked against as well as in providing actionable measures for improvement of a company's marketing performance.
Design/methodology/approach
This study applied the DEA approach to aid traditional benchmarking activities and to provide guidance to managers, and to evaluate the productivity and efficiency of manufacturing firms listed at the Indonesian Stock Exchange as a result of their marketing activities. The time period observed is 2001‐2007. The total number of manufacturing firms observed is 94.
Findings
The evidence shows that on average, this industry experienced total productivity decline by over the observation periods, mainly due to deterioration of managerial efficiency.
Originality/value
The paper compares public listed manufacturing firms in Indonesia.
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In light of the current debate on bank capital requirements, the purpose of this paper is to investigate the relative impact of capitalization on risk‐taking efficiency in Islamic…
Abstract
Purpose
In light of the current debate on bank capital requirements, the purpose of this paper is to investigate the relative impact of capitalization on risk‐taking efficiency in Islamic and conventional banks. The author tests whether changes occurring to the capital structure of such different types of intermediaries unevenly affect their behaviour in terms of risk‐taking efficiency.
Design/methodology/approach
The paper conducts an empirical analysis using data for the period 2001‐2011 by means of both standard regression methods and stochastic cost frontier techniques.
Findings
Results provide evidence that more capitalized Islamic banks are associated to less risky positions in terms of their asset structure. In particular, the latter exhibit higher liquidity standards and a lower incidence of non‐performing loans compared to other banks. This has delayed positive effects on profitability and no substantial impact on efficiency. On the other hand, highly capitalized conventional banks tend to shift from more traditional lending activities to investment in other (profit generating) assets. Such strategy increases profitability and efficiency, although raising impaired loans.
Research limitations/implications
This study does not address potential endogeneity concerns that might affect the variables at stake, hence mainly providing indications in terms of correlation between phenomena rather than causality.
Practical implications
The analysis has important practical implications when considering capital adequacy as a regulatory tool for managing the risk of Islamic banks' activity, following principles similar to those recommended by the Basel committee.
Originality/value
The original contribution of the paper to the literature consists of comparing the effects of capitalization in different types of banks, and results can be usefully exploited by policymakers wishing to tailor banking regulation on the specific model of banking they are entitled to regulate.