Abstract
This paper analyses the mechanisms through which binding finance constraints can induce debt-constrained firms to improve technical efficiency to guarantee positive profits. This hypothesis is tested on a sample of firms belonging to the Italian manufacturing. Technical efficiency scores are computed by estimating parametric production frontiers using the one stage approach as in Battese and Coelli [Battese, G., Coelli, T., 1995. A model for technical efficiency effects in a stochastic frontier production function for panel data. Empirical Economics 20, 325-332]. The results support the hypothesis that a restriction in the availability of financial resources can affect positively efficiency. © 2004 Elsevier B.V. All rights reserved.
| Original language | English |
|---|---|
| Pages (from-to) | 311-325 |
| Number of pages | 15 |
| Journal | European Journal of Operational Research |
| Volume | 172 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 1 Jul 2006 |
Keywords
- finance constraints
- productivity and competitiveness
- technical efficiency
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