Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
478722 | European Journal of Operational Research | 2010 | 9 Pages |
Abstract
This paper investigates whether productive inefficiency measured as the distance from the industry’s ‘best practice’ frontier is an important ex-ante predictor of business failure. We use samples of French textiles, wood and paper products, computers and R&D companies to obtain efficiency estimates for individual firms in each industry. These efficiency measures are derived from a directional technology distance function constructed empirically using non-parametric data envelopment analysis (DEA) methods. Estimating binary and ordered logit regression models we find that productive efficiency has significant explanatory power in predicting the likelihood of default over and above the effect of standard financial indicators.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Maria Psillaki, Ioannis E. Tsolas, Dimitris Margaritis,