Technical Efficiency in Transport Manufacturing Firms: Evidence From Malaysia

Fahmy-Abdullah, Mohd; Ismail, Rahmah; Sulaiman, Noorasiah; Talib, Basri Abdul

doi:10.21315/aamj2017.22.1.3

Cited by 18 publications

(39 citation statements)

References 42 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Stochastic frontier production function approach (SFPFA) and data envelopment analysis (DEA) are the two main techniques which can be used to estimate the technical efficiency (TE) of firms/industries and other sectors of the economy (Aigner, Lovell & Schmidt, 1977;Meeusen & Van den Broeck, 1977;Chavas & Aliber, 1993;Kumbhakar & Lovell, 2003;Rajesh, 2007;Faruq & Yi, 2010;Akpan et al, 2012;Pattnayak & Chadha, 2013;Kumar & Arora, 2012;Hamjah, 2014;Zhou, 2014;Mahajan, Nauriyal & Singh, 2014;Debnath & Sabastian, 2014;Bhatia & Mahendru, 2015;Munisamy, Fon & Khin, 2015;Sahu, 2015;Ng'ombe & Kalinda, 2015;Narwal & Pathneja, 2015;Ikram, Su & Sadiq, 2016); Okoye et al, 2016;Kea, Li & Pich, 2016;Vu, 2016;Fahmy-Abdullah et al, 2017;Gebresilassie, & Nyatanga, 2017;Singh, Narayanan & Sharma, 2018;Singh, Narayanan & Sharma, 2019). Efficiency is defined as the best allocation of resources to achieve the highest level of output (Bhatia & Mahendru, 2015).…”

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

“…Efficiency is defined as the best allocation of resources to achieve the highest level of output (Bhatia & Mahendru, 2015). Earlier studies have emphasized that the SFPFA model is more effective and rational to estimate the TE of all sectors as compared to other methods (Fahmy-Abdullah et al, 2017;Singh, Narayanan & Sharma, 2018).…”

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

“…It can be used in the case of parametric and non-parametric conditions (Ng'ombe & Kalinda, 2015;Okoye et al, 2016). Existing researchers have used SFPFA model to investigate the impact of various factors on output and to examine the TE of individual firm (Akpan et al, 2012;Pattnayak & Chadha, 2013;Zhou, 2014;Sahu, 2015;Ikram, Su & Sadiq, 2016); Vu, 2016;Fahmy-Abdullah et al, 2017). SFPFA model has also predicted the frontier level of inputs in the production activities of firms (Fahmy-Abdullah et al, 2017).…”

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

“…Existing researchers have used SFPFA model to investigate the impact of various factors on output and to examine the TE of individual firm (Akpan et al, 2012;Pattnayak & Chadha, 2013;Zhou, 2014;Sahu, 2015;Ikram, Su & Sadiq, 2016); Vu, 2016;Fahmy-Abdullah et al, 2017). SFPFA model has also predicted the frontier level of inputs in the production activities of firms (Fahmy-Abdullah et al, 2017). Technical efficiency (TE) is a measurement of a firm or industry which is capable to produce maximum output using a minimum quantity of inputs (Kumbhakar & Lovell, 2003).…”

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

“…Technical efficiency (TE) measures the ability of producers in manufacturing firms to produce the maximum amounts of output using available inputs and technologies (Kea, Li & Pich, 2016). TE is also useful to estimate allocative, production, and economic efficiency of manufacturing firms (Rajesh, 2007;Bhatia & Mahendru, 2015;Kea, Li & Pich, 2016;Fahmy-Abdullah et al, 2017;Singh, Narayanan & Sharma, 2018). Economic efficiency is achieved if the highest possible level of satisfaction is obtained from given resources in a manufacturing firm (Ikram, Su & Sadiq, 2016).…”

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

See 4 more Smart Citations

Estimating Factors Affecting Technical Efficiency in Indian Manufacturing Sector

Singh

Ashraf

Arya

2019

EJBE

View full text Add to dashboard Cite

Existing studies could not estimate the technical efficiency (TE) of firms and it's affecting factors in the Indian manufacturing sector. So, the present study examines the TE of firms using a stochastic frontier production function approach. Thereupon, it examines the impact of S&T and IPRs related factors on estimated TE of firms using a linear regression model. Estimated values of TE of firms show that most firms have a TE of 94%; thus, firms are efficient in producing surplus production in the manufacturing sector. It is acclaimed that firms can improve production scale using more technological upgradation and advancement. Furthermore, empirical results indicate that process innovations of firms, quality certification of firm, firm acquired process/product patents, in-house R&D expertise of firms, public-technology support institutions of firms, proficiency to improve processes of firms, new or improved products of firms, waste management capabilities of firms, and skilled workforce of firms are appeared effective activities to increase the TE of firms. It is proposed that there is a requirement to increase R&D expenditure, a collaboration of industries with research academia, incentive to researchers and scientists to do extensive research in emerging sectors of technologies and appropriate financial support to firms to boost the growth of Indian manufacturing sector.

show abstract

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

Section: Theoretical Framework Of Stochastic Frontier Production Funcmentioning

confidence: 99%

See 3 more Smart Citations

Estimating Factors Affecting Technical Efficiency in Indian Manufacturing Sector

Singh

Ashraf

Arya

2019

EJBE

View full text Add to dashboard Cite

show abstract

Does firm size matter? Decomposing Korean firms’ productivity growth based on a stochastic frontier approach and its policy implications

Yeo

Park

2022

Asian Journal of Technology Innovation

View full text Add to dashboard Cite

Impact of technical efficiency and input-driven growth in the Indian food processing sector

Akram,

Al-Zyoud,

Illiyan

et al. 2023

JEAS

View full text Add to dashboard Cite

PurposeThis study examines the performance of India's food processing sector by estimating its output growth, technical efficiency (TE) and input-driven growth (IDG)Design/methodology/approachThis study used panel data from six food processing manufacturing industries for the period 2000–01 to 2017–18. Technical efficiency and input-driven growth was measured using the parametric half-normal stochastic frontier production function.FindingsThe findings of this study showed that the estimated average technical efficiency is 86.6%, which specifies that the Indian food processing sector is technically inefficient. In addition, the output growth rate is 5.5%, driven by high doses of inputs (5.7%), whereas there is no indication of constant returns to scale. However, the food processing sector has experienced more input-driven expansion than either technological or efficiency changes.Research limitations/implicationsThis study is limited to India's organized manufacturing food processing sector; the aggregate macro data at a three-digit level based on the national industrial classification (NIC) was used. This study provides robust estimates for industrialists and processors, as well as concrete policy formulations on how overdoses of inputs may lead to high exploitation of resources, whereas outputs can be augmented by implementing upgraded and new technologies.Originality/valuePrevious research has estimated the total factor productivity and technical efficiency only in order to analyze the food sector's performance, but none of the studies have evaluated the share of inputs in growth performance and efficiency. Therefore, this study contributes by measuring growth performance and the share of inputs in the growth performance of India's food processing sector.

show abstract

Technical Efficiency in Transport Manufacturing Firms: Evidence From Malaysia

Abstract: ABSTRACT

Cited by 18 publications

References 42 publications

Estimating Factors Affecting Technical Efficiency in Indian Manufacturing Sector

Estimating Factors Affecting Technical Efficiency in Indian Manufacturing Sector

Does firm size matter? Decomposing Korean firms’ productivity growth based on a stochastic frontier approach and its policy implications

Impact of technical efficiency and input-driven growth in the Indian food processing sector

Contact Info

Product

Resources

About