Zhichao Wang and Valentin Zelenyuk
Estimation of (in)efficiency became a popular practice that witnessed applications in virtually any sector of the economy over the last few decades. Many different models were…
Abstract
Estimation of (in)efficiency became a popular practice that witnessed applications in virtually any sector of the economy over the last few decades. Many different models were deployed for such endeavors, with Stochastic Frontier Analysis (SFA) models dominating the econometric literature. Among the most popular variants of SFA are Aigner, Lovell, and Schmidt (1977), which launched the literature, and Kumbhakar, Ghosh, and McGuckin (1991), which pioneered the branch taking account of the (in)efficiency term via the so-called environmental variables or determinants of inefficiency. Focusing on these two prominent approaches in SFA, the goal of this chapter is to try to understand the production inefficiency of public hospitals in Queensland. While doing so, a recognized yet often overlooked phenomenon emerges where possible dramatic differences (and consequently very different policy implications) can be derived from different models, even within one paradigm of SFA models. This emphasizes the importance of exploring many alternative models, and scrutinizing their assumptions, before drawing policy implications, especially when such implications may substantially affect people’s lives, as is the case in the hospital sector.
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R. Färe, S. Grosskopf, F.R. Forsund, K. Hayes and A. Heshmati
This paper seeks to model and compute productivity, including a measure of quality, of a service which does not have marketable outputs – namely public education at the micro…
Abstract
Purpose
This paper seeks to model and compute productivity, including a measure of quality, of a service which does not have marketable outputs – namely public education at the micro level. This application is a case study for Sweden public schools.
Design/methodology/approach
A Malmquist productivity index is employed which allows for multiple outputs or outcomes such as test results and promotions without requiring price data with which to aggregate these outputs. It also allows one to account for inputs such as teachers and facilities as well as proxies for quality of the inputs (e.g. experience of teachers) and outputs. This model generalizes the basic data envelopment analysis (DEA) models – used successfully to measure performance in many educational applications – to the intertemporal case. A way of computing quality and quantity components of overall productivity is employed.
Findings
The case study is an application to the Swedish primary and secondary school system over the 1992 to 1995 period. It was found that quality “matters”, i.e. productivity growth changes when one accounts for quantity.
Research limitations/implications
The data available implied that the specification is restricted to an intermediate production model, i.e. the output data only account for the intermediate outcomes of education like grades and promotions, but not the longer term outcomes related to success in the job market or higher education, which one proposed as a task for future research.
Originality/value
The indices which are computed at the micro level are of value for policy purposes (does investment in quality matter?) and in an evaluation context.
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Although the threat of terrorist attacks is not a new phenomenon for hotels, limited literature exists on measures that hotels can take to prevent them or limit their damage. The…
Abstract
Purpose
Although the threat of terrorist attacks is not a new phenomenon for hotels, limited literature exists on measures that hotels can take to prevent them or limit their damage. The purpose of this paper is to propose a baseline strategy to address this threat.
Design/methodology/approach
Using the terrorist attack cycle and the security function models introduced in this paper, 19 hotel security experts, members of an international working group on terrorism, were tasked to reach consensus on a baseline anti‐terrorist strategy for a hotel. To reach this consensus, the study employed the Nominal Group Technique.
Findings
The study presents a six‐step baseline anti‐terrorism strategy and a series of measures and actions under each step. In the centre of this strategy lies the disruption of the terrorist attack cycle.
Research limitations/implications
There are limitations inherent to the Nominal Group Technique which may not allow the generalizability of the findings. However, every effort was made to ensure the reliability and validity of the study.
Practical implications
The study suggests a shift from physical protection alone to a more intelligence‐led approach. Counter‐surveillance, terrorist behavioral analysis, higher visibility of security measures, stronger relationships with local community leaders, collaborative relationships with emergency response agencies and strategic use of risk intelligence providers will have to take a higher place in the agendas of hotel security departments.
Originality/value
The paper presents, for the first time, two models that industry practitioners will find useful when designing security policies: the terrorist attack cycle and the security function model. Each component of the proposed strategy provides a starting point for the design of security strategies tailored on the security needs and budget of any hotel property.
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Charter schools have the potential to enhance competition in the public education sector. As such, they could have a particularly significant impact in the labor market for…
Abstract
Charter schools have the potential to enhance competition in the public education sector. As such, they could have a particularly significant impact in the labor market for teachers. This study uses data on more than 312,000 teachers from 483 urban Texas school districts to explore the impact of charter school competition on the compensation of teachers at traditional public schools. The analysis suggests that once charter enrollments reach critical mass, increasing competition from charter schools increases salaries for all but the most experienced teachers.
Gives an overview of the Australian banking industry, reviews relevant research and analyses productivity changes 1995‐1999 in a panel of 17 banks to assess the effects of…
Abstract
Gives an overview of the Australian banking industry, reviews relevant research and analyses productivity changes 1995‐1999 in a panel of 17 banks to assess the effects of deregulation and the reforms introduced by the Wallis report (1997). Explains the methodology (Malmquist indices calculated by data envelopment analysis) and presents the results, which show a decline of 3.1 per cent in technical efficiency over the period and of 3.5 per cent in the total factor productivity index, although there was an annual productivity growth rate of 1.3 per cent. Discusses the underlying reasons for this, compares productivity changes in individual banks and finds that size makes no difference. Considers the implications for policy makers, describes the industry as having a “limit of deregulation” syndrome and believes that further productivity gains depend on advances in technology.
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The processes of liberalisation, globalisation and integration have brought new dynamics into banking markets. In an increasingly competitive environment, banks have been forced…
Abstract
The processes of liberalisation, globalisation and integration have brought new dynamics into banking markets. In an increasingly competitive environment, banks have been forced to refocus their strategies and examine their performance, because their survival in the 21st century will depend on efficiency (Denizer & Tarimcilar, 2001). In recent years, therefore, bank efficiency has received wide attention, and researchers have developed an extensive array of sophisticated methods and tools to estimate efficiency.
Giselle Cappellesso, Cristiano Moreira Raimundo and Karim Marini Thomé
This study aims to measure the intensity of innovation in the Brazilian food sector and compares it to other manufacturing sectors in the country.
Abstract
Purpose
This study aims to measure the intensity of innovation in the Brazilian food sector and compares it to other manufacturing sectors in the country.
Design/methodology/approach
The authors used economic and financial data provided by the annual survey of industry [Pesquisa Industrial Anual (PIAs), in Portuguese] and other supporting data provided by the survey of innovation [Pesquisa de Inovação (PINTEC), in Portuguese] and the classification of technology intensity (TI) proposed by the Organization for Economic Co-operation and Development. The authors subsequently applied the Malmquist index in addition to the data envelopment analysis to measure innovation.
Findings
The results reveal that the Brazilian food sector is classified as a sector with low TI and investment in research and development (R&D), which represents one of the lowest rates when compared to other sectors. Thus, the Brazilian food sector is far from achieving its full potential. Nevertheless, the authors noticed that the sugar refinery industry showed an evolution in its technology frontier and presented a frequency of innovation similar to the average of high-tech industries.
Originality/value
This study contributes to the debate on innovation in the food sector, emphasizing the need to accomplish higher investments in R&D to increase the productivity of the sector.
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This chapter provides a survey of alternative methodologies for measuring and comparing productivity and efficiency of airlines, and reviews representative empirical studies. The…
Abstract
This chapter provides a survey of alternative methodologies for measuring and comparing productivity and efficiency of airlines, and reviews representative empirical studies. The survey shows the apparent shift from index procedures and traditional OLS estimation of production and cost functions to stochastic frontier methods and Data Envelopment Analysis (DEA) methods over the past three decades. Most of the airline productivity and efficiency studies over the last decade adopt some variant of DEA methods. Researchers in the 1980s and 1990s were mostly interested in the effects of deregulation and liberalization on airline productivity and efficiency as well as the effects of ownership and governance structure. Since the 2000s, however, studies tend to focus on how business models and management strategies affect the performance of airlines. Environmental efficiency now becomes an important area of airline productivity and efficiency studies, focusing on CO2 emission as a negative or undesirable output. Despite the fact that quality of service is an important aspect of airline business, limited attempts have been made to incorporate quality of service in productivity and efficiency analysis.
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Teresa García-Valderrama, Jaime Sanchez-Ortiz and Eva Mulero-Mendigorri
The objective of this work is to demonstrate the relationships between the two main processes of research and development (R&D) activities: the knowledge generation phase (KPP…
Abstract
Purpose
The objective of this work is to demonstrate the relationships between the two main processes of research and development (R&D) activities: the knowledge generation phase (KPP) and the knowledge commercialization, or transfer, phase (KCP), in a sector that is intensive in this type of activity, such as the pharmaceutical sector. In addition, within the framework of the general objective of this work, the authors propose two other objectives: (1) make advances in network efficiency measurement models, and (2) determine the factors associated with efficiency in the KPP and in the KCP in companies of the pharmaceutical sector in Spain.
Design/methodology/approach
A Network Data Envelopment Analysis (NDEA) model (Färe and Grosskopf, 2000) with categorical variables (Lee et al., 2020; Yeh and Chang, 2020) has been applied, and a sensitivity analysis of the obtained results has been performed through a DEA model of categorical variables, in accordance with the work of Banker and Morey (1986), to corroborate the results of the proposed model. The sample is made up of 77 companies in the pharmaceutical sector in Spain.
Findings
The results obtained point to a greater efficiency of pharmaceutical companies in the KPP, rather than in the KCP. Furthermore, the study finds that 1) alliances between companies have been the accelerating factors of efficiency in the KCP (but patents have slowed this down the most); 2) the quality of R&D and the number of R&D personnel are the factors that most affect efficiency in the KPP; and 3) the quality of R&D again, the benefits obtained and the position in the market are the factors that most affect efficiency in the KCP.
Originality/value
The authors have not found studies that show whether the efficiency obtained by R&D-intensive companies in the KPP phase is related to better results in terms of efficiency in the KCP phase. No papers have been found that analyse the role of alliances between R&D-intensive companies and patents, as agents that facilitate efficiency in the KCP phase, covering the gap in the research on both problems. Notwithstanding, this work opens up a research path which is related to the improvement of network efficiency models (since it includes categorical variables) and the assessment of the opinions of those who are responsible for R&D departments; it can be applied to decision-making on the aspects to improve efficiency in R&D-intensive companies.