Corporate Financing and Firm Efficiency: A Data Envelopment
      Analysis Approach

Rahim, Imad; Shah, Attaullah

doi:10.30541/v58i1pp.1-25

Cited by 3 publications

(2 citation statements)

References 52 publications

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“…Based on the results of the research conducted, this study has several limitations, such as the only independent variables are leverage, tangibility, working capital, liquidity, productivity, and profitability. Therefore, suggestions for further research are to add other independent variables to test their effect on firm efficiency, such as firm size and firm risk (Rahim & Shah, 2019).…”

Section: Suggestionsmentioning

confidence: 99%

Factors Affecting Firm Efficiency Of Manufacturing Companies Listed In Indonesia Stock Exchange

Agustina

Luppianti

Muchtar

2022

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This study aims to analyze the effect of financial ratios on company efficiency. This study was conducted using a data sample of 29 manufacturing companies in the various industrial sub-sectors listed on the Indonesia Stock Exchange (IDX) within a reporting period of 5 years (2016 – 2020). The sampling technique uses purposive sampling and uses panel data regression analysis methods. The independent variables in this study consist of leverage, tangibility, working capital, liquidity, productivity, and profitability, while the dependent variable is firm efficiency. The results show that leverage, tangibility, liquidity, and productivity have a significant negative effect on firm efficiency, while working capital, gross profit, and return on equity have no effect on firm efficiency. This finding is expected to be a reference for manufacturing companies in the various industrial sub-sectors in improving company efficiency.

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Section: Suggestionsmentioning

confidence: 99%

Factors Affecting Firm Efficiency Of Manufacturing Companies Listed In Indonesia Stock Exchange

Agustina

Luppianti

Muchtar

2022

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“…Next, Banker et al (1984) propose the BBC efficiency measurement model that assumes variable return to scale (vrs). Following Rahim and Shah (2019), this study uses total assets and operational costs as the input proxies and sales as the output proxy. The following mathematical formula measures efficiency (Benicio & De Mello, 2015).…”

Section: Data and Variablesmentioning

confidence: 99%

Market power or efficiency? An empirical study on the Indonesian fertilizer industry

Destiartono

Purwanti

2021

jeb

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This article aims to analyze the Indonesian fertilizer industry's market structure, efficiency, and performance determinants. This study applies the Structure-Conduct-Performance (SCP) framework proposed by the Harvard (market power) and UCLA-Chicago School (efficiency structure) schools of thought. We run Data Envelopment Analysis (DEA) and panel data regression to analyze the panel data constructed from annual reports of fertilizer producers in 2008 – 2017 and statistical publications from the agriculture ministry. DEA is a nonparametric method that measures technical and scale efficiencies. Meanwhile, panel data regression estimates the determinants of firm performance (ROA). The results show that the fertilizer industry has market power based on three characteristics; the number of incumbents (five), degree of market concentration (95.48 percent), and barrier to entry condition. Meanwhile, its industrial technical efficiency score is low (0.584), but its scale efficiency score is high (0.950). The results also show that firm performance is determined by efficiency, not market power. Both technical and scale efficiency positively and significantly affect performance. On the other hand, market power does not significantly affect performance. This finding supports the UCLA-Chicago School that efficiency is the main factor of firm performance.

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Impact of capital structure and free cash flow on the efficiency of energy firms in Saudi Arabia

Rahman Shaik

2024

Investment Management and Financial Innovations

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The components of free cash flow and a firm’s capital structure affect the value of the firm. A firm with efficient cash management and optimum capital structure tends to have a better firm value. The current study examines the effect of capital structure and free cash flow on energy firms’ efficiency in Saudi Arabia. The data required for analysis were collected from a sample of seven energy companies from 2014 through 2022. The study used Data Envelopment Analysis to measure the efficiency of energy firms. Further, the simple regression and Generalized Linear Model were used to estimate the results. The study reports an average efficiency score of 1.13 for the energy companies, showing an efficiency increase. The results of simple regression are consistent with the results of the Generalized Linear Model. The study findings demonstrate that the association of firms’ capital structure is positive and significant (with a coefficient of 41.60, significant at a p-value of 0.01) to the efficiency of Saudi Arabian energy firms. Further, current research results indicate that firms’ free cash flows negatively affect the efficiency (with a coefficient of –0.79 and insignificant) of Saudi Arabian energy firms with no evidence. Therefore, the study accepts the association of free cash flow and firms’ efficiency as positive and rejects the alternative hypothesis that there is a negative association between free cash flow and efficiency in Saudi Arabian energy firms. AcknowledgmentThe researcher extends appreciation to Prince Sattam Bin Abdulaziz University for funding this research through the project number 2023/02/25856.

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Corporate Financing and Firm Efficiency: A Data Envelopment Analysis Approach

Cited by 3 publications

References 52 publications

Factors Affecting Firm Efficiency Of Manufacturing Companies Listed In Indonesia Stock Exchange

Factors Affecting Firm Efficiency Of Manufacturing Companies Listed In Indonesia Stock Exchange

Market power or efficiency? An empirical study on the Indonesian fertilizer industry

Impact of capital structure and free cash flow on the efficiency of energy firms in Saudi Arabia

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