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Productivity, efficiency and firm’s market value: Microeconomic evidence from multinational corporations

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  • Panayiotis Tzeremes

Abstract

The paper proposes a conditional range directional distance estimator by modifying the range directional distance model utilizing the probabilistic characterization of directional distance functions (DDF). Moreover, as an illustrative example the paper applies the proposed estimator on a sample of 89 multinational corporations for the period 2006-2012. The paper examines the effect of firms’ market value on their estimated operational performance levels. Inefficiency measures are estimated over the examined period. The results reveal a nonlinear (U-shape) relationship between firms’ market value and their operating efficiency levels. Finally, the analysis from applying the local linear estimator reveals that lower market values are associated with higher operating inefficiencies, whereas, higher market values are associated with higher operating efficiencies.

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  • Panayiotis Tzeremes, 2020. "Productivity, efficiency and firm’s market value: Microeconomic evidence from multinational corporations," Bulletin of Applied Economics, Risk Market Journals, vol. 7(1), pages 95-105.
    • Handle: RePEc:rmk:rmkbae:v:7:y:2020:i:1:p:95-105
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    More about this item

    Keywords

    Productivity; Firm’ production; Efficiency; Market value; Microeconomic analysis;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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