Editors: Francisco Vargas and Ali Emrouznejad
Editor-in-chief: Prof. Johannes Platje
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Vol. 2, No. 1, 11-42, March 2018
Assessing the efficiency of urban co-operative banks in India
Author: Swati RAJU
Mumbai School of Economics and Public Policy, University of Mumbai, India
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Aim: Urban Co-operative Banks are a small segment albeit significant constituent in the multi-stage credit delivery mechanism of the banking sector in India. These banks have an organisational, managerial and regulatory structure different from commercial banks. It is, therefore, of interest to study the efficiency with which these banks perform their core banking and off balance sheet activities. This paper focuses on the measurement of efficiency in the conduct of core banking and off balance sheet activities for the period 2013-14 to 2015-16.
Design / Research methods: The main idea is to employ the parametric Stochastic Frontier Analysis and the non-parametric Data Envelopment Analysis to measure the efficiency of Urban Co-operative Banks. We estimate two models for both the frontier methods, Model A examines the efficiency in core banking activity and Model B for the off balance sheet activities. The analysis of super efficiency undertaken helps identify the most efficient bank while the quartile analysis provides an insight into the distribution of efficiency (for both Models A and B). A Tobit model (for both Models A and B) has also been estimated to identify the determinants of efficiency.
Conclusions / findings: We find that Urban Co-operative banks display a higher mean efficiency in core banking activities (Model A) as compared to the off-balance sheet activities (Model B) and this finding has been reiterated by the frequency distribution of efficiency for both the frontier methods. The difference is the mean efficiency obtained for Models A and B is much wider under the stochastic frontier analysis. The analysis of super efficiency points out that of the three banks efficient under Model A and five efficient banks under Model only one bank is common to both the models. The quartile analysis highlights that 38.9 percent of the UCBs are ranked in the lower two quartiles of efficiency. The Tobit regression model has identified deposits and loans disbursed as significant determinants of efficiency for both models.
Originality / value of the article: This study contributes significantly to the existent gap in the literature on efficiency measurement of banks in India by focussing on efficiency measurement among urban co-operative banks who play an important role in urban financial inclusion.
Implications of the research: This study is the only study that has measured the efficiency in operations of Urban Co-operative Banks and can hence provide an insight into the operations of these banks. It can also help individual banks in taking appropriate measures to improve efficiency.
Key words: urban co-operative banks; efficiency, super efficiency
JEL: E5, C6.
Vol. 2, No. 1, 43-64, March 2018
Efficiency container ports in Brazil: A DEA and FDH approach
Authors: Alexandra Maria RIOS CABRAL
Federal University of Alagoas, Brazil
Francisco S. RAMOS
Federal University of Pernambuco, Brazil
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Aim: This study aims to evaluate the technical efficiency of 44 Brazilian port terminals that handled containers in 2016. The evaluation will first proceed by identifying the main benchmarks. It will then provide an analysis of variables that may have an effect on technical efficiency as well as the nature of their relationship with the latter – namely: container movement and specialized terminals.
Design / Research methods: In this work, we apply the techniques of Data Envelopment Analysis and Free Disposal Hull. Output-oriented models were constructed, using three inputs – berth depth, berth length and number of berths; and three outputs – number of containers handled, medium board measured in container handled per hour of mooring, and medium consignment rate measured in container throughput per ship.
Conclusions / findings: The main results show that half of the terminals have an inefficient infrastructure, with a capacity larger than necessary to meet current demand for transportation of containers. In addition, there is a strong relationship between the efficiency and size of a terminal port and between the efficiency and degree of specialization. Moreover, the private use terminal (TUP) of Itacal and the public quay of OCRIM can serve as benchmarks for most of the terminals.
Originality / value of the article: Relatively few studies in the literature have tried to measure technical efficiency for developing countries. Moreover, none of the studies found regarding Brazilian ports have shown the scenario after promulgation of the Port Law in 2013, and only a few have used container cargo as their focus. This article is of interest for scientists in the transportation sector, exporters/importers, and Brazilian Government officers interested in observing the effects of public policies aimed at the sector. We also suggest future work concerning the sector’s improvements, which can follow from our findings.
Key words: DEA, FDH, container terminal, Brazilian ports, port efficiency, technical efficiency.
JEL: R42, O18, L95, N76
Vol. 2, No. 1, 65-78, March 2018
Efficiency analysis of airports in Turkey considering environmental effects
Author: Berna H. ULUTAS
Eskisehir Osmangazi University, Turkey
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Aim: This paper aims to attract attention to the “green airport” term that is basically related with environmental legislations.
Design / Research methods: A Data Envelopment Analysis (DEA) model is introduced to assess the efficiency of 22 airports in Turkey with the definition of undesirable output as emission values.
Conclusions / findings: Results illustrate that only two airports are efficient based on the considered outputs and undesirable output.
Originality / value of the article: Up-to-best knowledge, green gas emission data of airports in Turkey are considered in a DEA model for the first time. To minimize the undesirable output, it is considered as a desirable input in the model. Results are expected to support official authorities during decision making.
Limitations of the study: Data for noise levels and the exposed area and/or number of exposed people and buildings were not available for the airports in concern.
Key words: airport efficiency, data envelopment analysis, undesired outputs, environmental factors, noise level, handicap friendly airport, green airport
JEL: L93, L98, O18, O44, Q53, R11, R15
Vol. 2, No. 1, 79-101, March 2018
Efficiency in food grains production in India using DEA and SFA
Authors: Tajani Neeraj MATHUR
Sies College of Arts, Science and Commerce, India
Swati RAJU RAMNATH
Mumbai University, India
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Aim: Food security is a multi-dimensional issue and is concerned with aspects such as availability, access and utilisation. It would require major interventions that will transform the current patterns and practices of food production, distribution and consumption. Food security can be attained by increasing the level of agricultural productivity and efficiency and improvements in agricultural efficiency are at the core of the quest for food security. This paper seeks to examine the efficiency in food grains production in India for the period 1960-61 to 2013-14.
Design / Research methods: The key idea is to employ the non-parametric Data Envelopment Analysis and the parametric Stochastic Frontier Analysis to measure the efficiency of food grains production in India. We have estimated an input oriented single output, multi – input DEA models (CRS – DEA and VRS- DEA) of agricultural production to measure the efficiency in food grains production for two time periods 1960-61 to 1989-90 and 1991-92 to 2013-14. The analysis of super efficiency was conducted for both these time periods helped identify the years in which food grains production was most efficient.
Conclusions / findings: We find high average efficiency in farming operations for both the frontier methods. However, the range of efficiency obtained varies considerably for the different frontier methods. The period after 1990 has witnessed improved agricultural performance as can be inferred from the frequency distribution of the efficiency scores which indicates that during this period the overall efficiency scores have been higher and there was not a single year in which the efficiency levels have been less than 0.9. The analysis of super efficiency also vindicates the improved performance of the agricultural sector in the post 1990 periods as greater number of years recorded an efficiency score greater than 1 as compared to the previous period. However, the super efficiency scores recorded in the period 1961-1990 were higher than those in the post 1990 years suggesting thereby that there could be a tapering of the positive impact of the Green Revolution. Efficiency estimates obtained by the SFA model are marginally lower than that of the DEA model and the results of the SFA model indicate net sown area, net irrigated area and pesticides to be statistically significant inputs.
Originality / value of the article: This study contributes significantly to the literature on efficiency measurement of agricultural production in India by focussing on efficiency measurement of food grains. Most studies focus on farm level data and /or on individual crops.
Implications of the research: This results of this study have implications for the issue of food security in India. Its results indicate that a need to expand irrigation facilities and net sown area to improve efficiency in food grain production which is vital for the issue of food security.
Key words: agriculture efficiency, food grains production, food security
JEL: C6, Q18.
Vol. 2, No. 1, 103-132, March 2018
DEA Based Approach to Set Energy Efficiency Target under PAT Framework: A Case of Indian Cement Industry
Author: Anoop SINGH, Bharat SHARMA
Indian Institute of Technology Kanpur, India
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Aim: Propose a Data Envelopment Analysis (DEA) based approach to set energy efficiency targets under the Perform, Achieve and Trade (PAT) framework of the Bureau of Energy Efficiency (BEE)
Design / Research methods: We adopt input-oriented non-controllable DEA model with variable return to scale DEA
Conclusions / findings: Due to the implication of in-house energy conversion, we estimate separate energy efficiency targets based on “purchased energy” as well as “process energy”. The later accounts for energy finally used in the production process after in-house energy conversion.
Originality / value of the article: The Bureau of Energy Efficiency (BEE) in India has introduced a market based energy efficiency mechanism under the Perform, Achieve and Trade (PAT) framework. Under this mechanism, energy efficiency certificates can be traded across eight identified sectors thus bringing cost effectiveness to achieve the energy efficiency targets. To implement the scheme, differentiated energy efficiency targets have been set using baseline specific energy consumption. This approach does not account for technical and operational aspects like vintage, scale, output mix and input mix. This study proposes an alternative target setting method based on Data Envelopment Analysis (DEA) which takes into account some of the above mentioned technical and operational differences across the industrial plants. A comparative assessment highlights the efficacy of DEA methodology in implementation of the PAT scheme. We estimate energy efficiency targets based on “purchased energy” as well as “process energy”, i.e. that used finally in the production process.
Implications of the research: BEE may adopt the suggested approach to set energy efficiency targets for subsequent cycles under the Perform, Achieve and Trade (PAT) framework.
Key words: energy efficiency target, PAT framework, Data Envelopment Analysis, Indian cement industry
JEL: Q48, Q49
Vol. 2, No. 1, 133-153, March 2018
Investigating cooperative purchasing performance – a survey of purchasing professionals in Dutch hospitals
Authors: Cees Johannes GELDERMAN, Jelle De JONGE, Jos SCHIJNS, Janjaap SEMEIJN
Open University of the Netherlands, The Netherlands
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Aim: Cooperative purchasing is considered a promising area for lowering the cost in the health care sector, although recent initiatives show mixed results. The purpose of this study is to find a thorough explanation for the performance of cooperative purchasing in healthcare by investigating the role of trust, commitment, organizational factors (i.e. group formality, and IT system effectiveness) and interpersonal skills (i.e. teamwork skills, and communication).
Design / Research methods: A conceptual model for the performance of cooperative purchasing was developed. This model was empirically validated using a survey of 88 Dutch hospital purchasing professionals.
Conclusions / findings: Analysis shows a significant impact of trust and commitment in cooperative purchasing groups on performance. Group formality and teamwork skills appear to be essential for achieving trust and cooperative purchasing performance. We also found a positive impact of IT system effectiveness on commitment, not on trust. Positive feelings about the group and positive expectation about the continuity of the group can be stimulated through effective IT systems. Since proper IT support is often neglected in many healthcare organizations, management efforts to improve IT systems could truly facilitate the tactical purchasing process of cooperative purchasing in hospitals.
Originality / value of the article: Many cooperative purchasing initiatives suffer from conflicts over the allocation of savings, time, and costs. Despite the growing importance of cooperative purchasing, few empirical studies have explored the effects on hospital performance. Our study extends previous research by investigating the relationships between trust, commitment, and the performance of cooperative purchasing (1) and the impact of organizational factors and interpersonal skills on trust and commitment in purchasing groups within a healthcare context (2).
Key words: cooperative purchasing, healthcare, trust, commitment, cooperative purchasing performance
Vol. 2, No. 1, 155-174, March 2018
Better the devil you know than the devil you don’t – financial crises between ambiguity aversion and selective perception
Authors: Peter SCHOLZ, Sinan KRUECKEBERG
Hamburg School of Business Administration, Germany
Andrássy University, Hungary, Claussen-Simon Graduate Centre at HSBA, Germany
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Aim: Financial crises are dangerous and frightening events with potentially severe consequences for investors, financial systems and even whole economies. Hence, we suppose that market participants show increased proneness to emotionally biased decisions during times of market distress. We test our hypothesis by analyzing two well-known behavioral effects: ambiguity aversion and selective perception.
Design / Research methods: The authors should clearly explain the way in which the aim or objective is achieved. The main research methods as well as the approach to the research should be provided that enable effective dealing with the paper’s aim.
First, we use GARCH volatilities of major stock indices as a measure of market distress and monthly data from the Economic Policy Uncertainty Indicator (EPUI) as a proxy for the level of market uncertainty. By estimating the Granger causality, we test whether uncertainty causally influences market volatility, which could be interpreted as a sign of ambiguity aversion of market participants. Second, we use sub-indices of the EPUI regarding financial regulation, monetary policy, and economic policy as a proxy for market awareness of these topics. By regressing on GARCH volatilities, which serve again as the measure for crises, we analyze if investors’ attention differs depending on market distress due to selective perception
Conclusions / findings: Overall, we find mixed results. For ambiguity aversion, we find causality for the total sample as well as for the subsamples of the first oil crisis, the Latin America crisis, the Asian crisis, and the subprime crisis. For selective perception, we find significant results for the total sample as well, as for the Dot.Com bubble and the subprime crisis.
Originality / value of the article: We add value by examining specific severe financial crises with respect to behavioral aspects of market participants. We want to learn whether the awareness of investors regarding important topics like monetary policy, financial regulation, and economic policy is stable over time and if uncertainty drives the market distress or vice versa. This knowledge is important to investors and policy makers.
Implications of the research: Investors and decision-makers need to focus e.g. on current discussions regarding financial regulation not only in times of distress but also in normal times. Otherwise, policy makers will be forced to react in times of pressure and cannot proactively devise regulation.
Limitations of the research: First, we did not check for spill-over effects. The question if volatility creates subsequent ripple effects in our framework is left for future research.
Second, for the Japanese crisis we did not find causality in our ambiguity aversion analysis. The question whether the link between levels of uncertainty and volatility is stronger once a bubble bursts on domestic soil remains unanswered in our paper.
Key words: ambiguity aversion, economic policy, financial crisis, financial regulation, monetary policy, selective perception, uncertainty.
JEL: G01, G02, G15, N22.
Vol. 2, No. 1, 175-187, March 2018
Alternative finance and sustainable development
Author: Anna MOTYLSKA-KUŹMA
WSB University in Wrocław, Poland
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Aim: The aim of this article is to evaluate alternative finance for the implementation of the basic assumptions and goals of sustainable development.
Design / Research methods: Using the comparative analysis the most frequent mentioned forms of alternative finance have been assessed. The analysis took into account both the assumptions and the basic goals of sustainable development.
Conclusions / findings: The conducted analysis show that despite many features that indicate the inclusion of alternative finance in philosophy of sustainable development, the implementation of the basic assumptions and goals are arbitrary. Many of the alternative forms do almost realized nothing.
Originality / value of the article: An juxtaposition of sources of financing with the concept of sustainable development is usually carried out when analyzing the funding opportunities for relevant initiatives. However, in this case, the assessment is concentrating on the sources of financing and implementation by them of the adopted sustainability assumptions and goals.
Key words: alternative finance, sustainable development.
JEL: G23, G24, G30, G32, O30.