Leverage, Technical Efficiency and Profitability: an application of DEA to foreign-invested toy manufacturing firms in China

Mok, Vincent; Yeung, Godfrey; Zhao-zhou, Han; Li, Zongzhang

doi:10.1080/10670560701194509

Cited by 35 publications

(17 citation statements)

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“…Accordingly, a Tobit model is appropriate for estimating the determinants of enterprise efficiency (Zhang et al, 2001;Wen et al, 2002;Mok et al, 2007). The dependent variable was the overall (CRS) technical efficiency score estimated from the DEA as outlined above.…”

Section: Methodology and Datamentioning

confidence: 99%

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Efficiency of Chinese enterprises: Does human resource management matter?

Wei

2012

Applied Economics Letters

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Data Envelopment Analysis (DEA) was applied to Chinese enterprises with different forms of ownership to estimate their efficiency. The efficiency scores obtained were further regressed against scores rating the implementation of Strategic Human Resource Management (SHRM) and other explanatory data. State-Owned Enterprises (SOEs) were the least efficient, whereas foreign-owned firms were the most efficient. Tentative evidence was found of a relationship between SHRM practices and enterprise efficiency, but only in foreign-and collectively owned enterprises, indicating that Chinese enterprises lack management skills or/and are still subject to tight institutional constraints than their foreign-invested counterparts.

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Section: Methodology and Datamentioning

confidence: 99%

“…Zheng et al (1998) and Zhang et al (2001Zhang et al ( , 2002 found that State-Owned Enterprises (SOEs) were the least efficient. The study by Mok et al (2007) analysed 238 foreign-invested firms and reported that their average technical efficiency was 54%.…”

Section: Introductionmentioning

confidence: 99%

Efficiency of Chinese enterprises: Does human resource management matter?

Wei

2012

Applied Economics Letters

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“…The positive relationship between firm capital structure and its performance measured by technical efficiency have been reported by Sena (2006), Mok et al (2007), Margaritis and Psillaki (2007), and Weill (2008). On the other hand, higher debt leads to a conflict of interest between shareholders and debtholders, suggesting negative relations between debt and performance (Jensen and Meckling, 1976;Myers, 1977;Harris and Raviv, 1991).…”

Section: Firm Performance Ownership and Capital Structure: A Selectmentioning

confidence: 95%

Corporate efficiency in Europe

Hanousek

Kočenda

Shamshur

2015

Journal of Corporate Finance

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Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less conductive to efficiency than moderate or low competition. In terms of ownership, we find that (iv) efficiency increases when a majority owner must deal with minority shareholders and that (v) domestic majority owners improve efficiency more than foreign majority owners when no minority shareholders are present, but (vi) the opposite is true when minority shareholders hold a substantial fraction of the firm's equity. In the analysis, we distinguish between a pre-crisis period (2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008) and a post-crisis period (2009)(2010)(2011), and find that our results are sensitive to the period of observation.

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“…-Regarding the leverage factor, high levels of debts increase all Vietnam listed manufacturing firms' profitability efficiency in general and sub-sector S3 enterprises' marketability efficiency in particular. This result is supported by Margaritis and Psillaki (2007) and Mok et al (2007), who demonstrate a significantly positive influence of leverage ratio on corporate efficiency levels. Hence, in order to boost Vietnam manufacturing firms' profit and marketability efficiency, increasing the level of debts might be a good financial option.…”

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confidence: 64%

Inadequate corporate profitability and marketability efficiency: A case of Vietnam manufacturing enterprises

Anh

Gan²

2019

El Sawah, S. (Ed.) MODSIM2019, 23rd International Congress on Modelling and Simulation.

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The manufacturing sector plays an increasingly pivotal role in the development of Vietnam. In the context of economic integration, Vietnam manufacturing enterprises receive abundant investment and market-expansion opportunities that enhance their operating profits and market values. With the aim of supporting corporate managers to position their firms competitively in the market as well as make wise management decisions, this study employs bootstrap two-stage data envelopment analysis technique to investigate the profitability and marketability efficiency of 102 listed manufacturing firms on Vietnam stock market from 2007 to 2018. The study also applies fractional regression models for panel data to identify the determinants of Vietnam manufacturing firms' efficiencies. Based on the empirical results, the study reveals that Vietnam manufacturing firms obtain higher profitability efficiency scores (0.888) than marketability efficiency scores (0.527) during the study period from 2007 to 2018. Thus, listed manufacturing enterprises in Vietnam should place more emphasis on market attractiveness to boost their enterprises' market value. Besides, different manufacturing sub-sectors achieve different levels of profitability and marketability efficiency during the study period 2007 to 2018. Specifically, the modern (high-tech) firms achieve higher average marketability efficiency scores from 2007 to 2018 and better profitability efficiency performance in the recent years from 2015 to 2018 than the traditional (resourceintensive and labour-intensive) manufacturing firms. The results also show the diverse and significant impacts of firm age, headcount, institutional ownership, cash level, and leverage ratio on profitability and marketability efficiency of Vietnam manufacturing enterprises.

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Leverage, Technical Efficiency and Profitability: an application of DEA to foreign-invested toy manufacturing firms in China

Cited by 35 publications

References 0 publications

Efficiency of Chinese enterprises: Does human resource management matter?

Efficiency of Chinese enterprises: Does human resource management matter?

Corporate efficiency in Europe

Inadequate corporate profitability and marketability efficiency: A case of Vietnam manufacturing enterprises

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