IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v127y2018icp746-762.html
   My bibliography  Save this article

Determinants of cost efficiency of bioenergy industry: Evidence from EU28 countries

Author

Listed:
  • Alsaleh, Mohd
  • Abdul-Rahim, A.S.

Abstract

Most previous bioenergy industry studies have focused on how to achieve a specific level of production. However, very few studies concentrate on the cost and the allocative and technical efficiency methods to achieve rational resource utilization. In light of the increase in the bioenergy industry's economic competitiveness within the energy market through proper allocation and utilization of available resources, this article analyzed the impact of country-specific and macroeconomic determinants of cost efficiency rate in the bioenergy industry in the EU28 zone. The fixed effects and random effect models have been used through the unbalanced data panel analysis method to examine the effect of EU28 region countries' development status and external economic determinants on the level of cost efficiency in the bioenergy industry in EU28. The findings show that the cost efficiency rate of the bioenergy industry among developing members are equal to those of developed members. The empirical results appear to suggest that cost efficiency has a different influence on the technical and allocative efficiency levels. It was found that capital cost, labor cost, GDP, inflation and interest rate affect the cost efficiency of the bioenergy industry in EU28 developing and developed members during the period of this study.

Suggested Citation

  • Alsaleh, Mohd & Abdul-Rahim, A.S., 2018. "Determinants of cost efficiency of bioenergy industry: Evidence from EU28 countries," Renewable Energy, Elsevier, vol. 127(C), pages 746-762.
    • Handle: RePEc:eee:renene:v:127:y:2018:i:c:p:746-762
    DOI: 10.1016/j.renene.2018.04.085
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S096014811830510X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2018.04.085?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Demirguc, Asli & Huizinga, Harry, 1999. "Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence," The World Bank Economic Review, World Bank, vol. 13(2), pages 379-408, May.
    2. Molyneux, Philip & Thornton, John, 1992. "Determinants of European bank profitability: A note," Journal of Banking & Finance, Elsevier, vol. 16(6), pages 1173-1178, December.
    3. Lynge Nielsen, 2011. "Classifications of Countries Basedon their Level of Development: How it is Done and How it Could Be Done," IMF Working Papers 2011/031, International Monetary Fund.
    4. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    5. Pasiouras, Fotios & Kosmidou, Kyriaki, 2007. "Factors influencing the profitability of domestic and foreign commercial banks in the European Union," Research in International Business and Finance, Elsevier, vol. 21(2), pages 222-237, June.
    6. Bode, Sven & Groscurth, Helmuth-Michael, 2006. "The Effect of the German Renewable Energy Act (EEG) on "the Electricity Price"," HWWA Discussion Papers 358, Hamburg Institute of International Economics (HWWA).
    7. Haelermans, Carla & Ruggiero, John, 2013. "Estimating technical and allocative efficiency in the public sector: A nonparametric analysis of Dutch schools," European Journal of Operational Research, Elsevier, vol. 227(1), pages 174-181.
    8. McDonald, John, 2009. "Using least squares and tobit in second stage DEA efficiency analyses," European Journal of Operational Research, Elsevier, vol. 197(2), pages 792-798, September.
    9. Staub, Roberta B. & da Silva e Souza, Geraldo & Tabak, Benjamin M., 2010. "Evolution of bank efficiency in Brazil: A DEA approach," European Journal of Operational Research, Elsevier, vol. 202(1), pages 204-213, April.
    10. Fadzlan Sufian, 2009. "Assessing the impact of mergers and acquisitions on bank profit efficiency: empirical evidence from Malaysia," International Journal of Decision Sciences, Risk and Management, Inderscience Enterprises Ltd, vol. 1(3/4), pages 258-285.
    11. Huang, Yongfu, 2010. "Political Institutions and Financial Development: An Empirical Study," World Development, Elsevier, vol. 38(12), pages 1667-1677, December.
    12. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
    13. Joe Zhu, 2009. "Envelopment DEA Models," International Series in Operations Research & Management Science, in: Quantitative Models for Performance Evaluation and Benchmarking, chapter 1, pages 1-42, Springer.
    14. Fadzlan Sufian, 2009. "Mergers and acquisitions and the determinants of bank total factor productivity: empirical evidence from Malaysia," World Review of Entrepreneurship, Management and Sustainable Development, Inderscience Enterprises Ltd, vol. 5(4), pages 407-427.
    15. Rajiv D. Banker & Hsihui Chang & Ram Natarajan, 2005. "Productivity Change, Technical Progress, and Relative Efficiency Change in the Public Accounting Industry," Management Science, INFORMS, vol. 51(2), pages 291-304, February.
    16. Truong, Nguyen Le & Gustavsson, Leif, 2014. "Cost and primary energy efficiency of small-scale district heating systems," Applied Energy, Elsevier, vol. 130(C), pages 419-427.
    17. Fadzlan Sufian & Muzafar Shah Habibullah, 2011. "Opening the Black Box on Bank Efficiency in China: Does Economic Freedom Matter?," Global Economic Review, Taylor & Francis Journals, vol. 40(3), pages 269-298, September.
    18. Banker, Rajiv D. & Chang, Hsihui & Lee, Seok-Young, 2010. "Differential impact of Korean banking system reforms on bank productivity," Journal of Banking & Finance, Elsevier, vol. 34(7), pages 1450-1460, July.
    19. Bourke, Philip, 1989. "Concentration and other determinants of bank profitability in Europe, North America and Australia," Journal of Banking & Finance, Elsevier, vol. 13(1), pages 65-79, March.
    20. Scarlat, N. & Dallemand, J.F. & Motola, V. & Monforti-Ferrario, F., 2013. "Bioenergy production and use in Italy: Recent developments, perspectives and potential," Renewable Energy, Elsevier, vol. 57(C), pages 448-461.
    21. Joe Zhu, 2009. "Quantitative Models for Performance Evaluation and Benchmarking," International Series in Operations Research and Management Science, Springer, number 978-0-387-85982-8, December.
    22. Rajiv D. Banker & Ram Natarajan, 2008. "Evaluating Contextual Variables Affecting Productivity Using Data Envelopment Analysis," Operations Research, INFORMS, vol. 56(1), pages 48-58, February.
    23. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    24. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, vol. 37(2), pages 287-302, February.
    25. Abramo, Giovanni & Cicero, Tindaro & D’Angelo, Ciriaco Andrea, 2011. "A field-standardized application of DEA to national-scale research assessment of universities," Journal of Informetrics, Elsevier, vol. 5(4), pages 618-628.
    26. Merkert, Rico & Hensher, David A., 2011. "The impact of strategic management and fleet planning on airline efficiency - A random effects Tobit model based on DEA efficiency scores," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(7), pages 686-695, August.
    27. Chang, J. & Leung, Dennis Y. C. & Wu, C. Z. & Yuan, Z. H., 2003. "A review on the energy production, consumption, and prospect of renewable energy in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 7(5), pages 453-468, October.
    28. Tye, Ying Ying & Lee, Keat Teong & Wan Abdullah, Wan Nadiah & Leh, Cheu Peng, 2011. "Second-generation bioethanol as a sustainable energy source in Malaysia transportation sector: Status, potential and future prospects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4521-4536.
    29. Pihl, Erik & Heyne, Stefan & Thunman, Henrik & Johnsson, Filip, 2010. "Highly efficient electricity generation from biomass by integration and hybridization with combined cycle gas turbine (CCGT) plants for natural gas," Energy, Elsevier, vol. 35(10), pages 4042-4052.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Figaj, Rafał, 2021. "Performance assessment of a renewable micro-scale trigeneration system based on biomass steam cycle, wind turbine, photovoltaic field," Renewable Energy, Elsevier, vol. 177(C), pages 193-208.
    2. Rodica Niculescu & Adrian Clenci & Victor Iorga-Siman, 2019. "Review on the Use of Diesel–Biodiesel–Alcohol Blends in Compression Ignition Engines," Energies, MDPI, vol. 12(7), pages 1-41, March.
    3. Lyazzat Yespergenova & Aliya Dosmanbetova & Yengilik Baisheva & Dinmukhamed Zhakipbekov & Myrzabike Zhumabayeva & Alimshan Faizulayev, 2023. "The Factors that Drives the Cost Management Efficiency of Oil and Gas companies in Emerging Markets: The Case of Eurasian Economic Union," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 328-334, January.
    4. Ighball Baniasad Askari & Hossein Ghazizade-Ahsaee & Alibakhsh Kasaeian, 2023. "Investigation of an ejector-cascaded vapor compression–absorption refrigeration cycle powered by linear fresnel and organic rankine cycle," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 9439-9484, September.
    5. Mohd Alsaleh & Azeem Oluwaseyi Zubair & Abdul Samad Abdul‐Rahim, 2020. "The impact of global competitiveness on the growth of bioenergy industry in EU‐28 region," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(5), pages 1304-1316, September.
    6. Bunea, Ovidiu-Iulian & Corbos, Razvan-Andrei & Popescu, Ruxandra-Irina, 2019. "Influence of some financial indicators on return on equity ratio in the Romanian energy sector - A competitive approach using a DuPont-based analysis," Energy, Elsevier, vol. 189(C).
    7. Lin, Boqiang & Raza, Muhammad Yousaf, 2020. "Analysis of energy security indicators and CO2 emissions. A case from a developing economy," Energy, Elsevier, vol. 200(C).
    8. Mohd Alsaleh & A. S. Abdul-Rahim, 2022. "An evaluation of bioenergy industry sustainability impacts on forest degradation: evidence from European Union economies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 1738-1760, February.
    9. Gómez-Marín, N. & Bridgwater, A.V., 2021. "Mapping bioenergy stakeholders: A systematic and scientometric review of capabilities and expertise in bioenergy research in the United Kingdom," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    10. Ruan, Fang-Li & Yan, Liang, 2022. "Interactions among electricity consumption, disposable income, wastewater discharge, and economic growth: Evidence from megacities in China from 1995 to 2018," Energy, Elsevier, vol. 260(C).
    11. To Trung Thanh & Le Thanh Ha & Hoang Phuong Dung & Tran Thi Lan Huong, 2023. "Impacts of digitalization on energy security: evidence from European countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11599-11644, October.
    12. Gaigalis, Vygandas & Katinas, Vladislovas, 2020. "Analysis of the renewable energy implementation and prediction prospects in compliance with the EU policy: A case of Lithuania," Renewable Energy, Elsevier, vol. 151(C), pages 1016-1027.
    13. Evgeniy Ganev & Boyan Ivanov & Natasha Vaklieva-Bancheva & Elisaveta Kirilova & Yunzile Dzhelil, 2021. "A Multi-Objective Approach toward Optimal Design of Sustainable Integrated Biodiesel/Diesel Supply Chain Based on First- and Second-Generation Feedstock with Solid Waste Use," Energies, MDPI, vol. 14(8), pages 1-38, April.
    14. Yunfei An & Dequn Zhou & Qunwei Wang, 2022. "Carbon emission reduction potential and its influencing factors in China’s coal-fired power industry: a cost optimization and decomposition analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 3619-3639, March.
    15. Elie, Bouri & Naji, Jalkh & Dutta, Anupam & Uddin, Gazi Salah, 2019. "Gold and crude oil as safe-haven assets for clean energy stock indices: Blended copulas approach," Energy, Elsevier, vol. 178(C), pages 544-553.
    16. Ni-Ni Yin & Ke-Liang Wang & Zhen Yao & Li-Li Ding & Zhuang Miao, 2022. "Total-factor air environmental efficiency and its influencing factors in the areas along the Belt and Road in China: A spatial spillover perspective," Energy & Environment, , vol. 33(4), pages 663-695, June.
    17. Mohd Alsaleh & Muhammad Mansur Abdulwakil & Abdul Samad Abdul-Rahim, 2021. "Does Social Businesses Development Affect Bioenergy Industry Growth under the Pathway of Sustainable Development?," Sustainability, MDPI, vol. 13(4), pages 1-19, February.
    18. Zhang, Xiaomei & Su, Bin & Yang, Jun & Cong, Jianhui, 2022. "Analysis of Shanxi Province's energy consumption and intensity using input-output framework (2002–2017)," Energy, Elsevier, vol. 250(C).
    19. Wang, Qiang & Jiang, Feng, 2019. "Integrating linear and nonlinear forecasting techniques based on grey theory and artificial intelligence to forecast shale gas monthly production in Pennsylvania and Texas of the United States," Energy, Elsevier, vol. 178(C), pages 781-803.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alsaleh, Mohd & Abdul-Rahim, A.S. & Mohd-Shahwahid, H.O., 2017. "Determinants of technical efficiency in the bioenergy industry in the EU28 region," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 1331-1349.
    2. Fadzlan Sufian & Muzafar Shah Habibullah, 2012. "Developments in the efficiency of the Malaysian banking sector: the impacts of financial disruptions and exchange rate regimes," Progress in Development Studies, , vol. 12(1), pages 19-46, January.
    3. Fadzlan Sufian & Muzafar Shah Habibullah, 2010. "Bank-specific, Industry-specific and Macroeconomic Determinants of Bank Efficiency," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 4(4), pages 427-461, November.
    4. Fakarudin Kamarudin & Bany Ariffin Amin Nordin & Junaina Muhammad & Mohamad Ali Abdul Hamid, 2014. "Cost, Revenue and Profit Efficiency of Islamic and Conventional Banking Sector: Empirical Evidence from Gulf Cooperative Council Countries," Global Business Review, International Management Institute, vol. 15(1), pages 1-24, March.
    5. Veronese da Silva, Aline & Costa, Marcelo Azevedo & Lopes-Ahn, Ana Lúcia, 2022. "Accounting multiple environmental variables in DEA energy transmission benchmarking modelling: The 2019 Brazilian case," Socio-Economic Planning Sciences, Elsevier, vol. 80(C).
    6. Fadzlan Sufian & Fakarudin Kamarudin, 2013. "Efficiency of the Bangladesh Banking Sector: Evidence from the Profit Function," Jindal Journal of Business Research, , vol. 2(1), pages 43-57, June.
    7. Mohd Alsaleh & A.S. Abdul-Rahim & H.O. Mohd-Shahwahid & Lee Chin & Fakarudin Kamarudin, 2016. "An Empirical Analysis for Technical Efficiency of Bioenergy Industry in EU28 Region Based on Data Envelopment Analysis Method," International Journal of Energy Economics and Policy, Econjournals, vol. 6(2), pages 290-304.
    8. Fadzlan Sufian, 2016. "Financial Crisis, Exchange Rate Regimes, Organizational Forms, and Bank Efficiency: Does Globalization Matter?," Emerging Economy Studies, International Management Institute, vol. 2(1), pages 27-71, May.
    9. Md. Shahidul Islam & Shin-Ichi Nishiyama, 2016. "The Determinants of Bank Profitability: Dynamic Panel Evidence from South Asian Countries," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 6(3), pages 1-6.
    10. Alessandro Fiorini, 2016. "Technical efficiency in a technological innovation system perspective: The case of bioenergy technologies R&D resources mobilisation in a sample from EU-28," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2016(2), pages 107-127.
    11. Ha Nguyen, 2023. "Credit Risk and Financial Performance of Commercial Banks: Evidence from Vietnam," Papers 2304.08217, arXiv.org, revised Apr 2023.
    12. Simar, Léopold & Wilson, Paul W., 2020. "Technical, allocative and overall efficiency: Estimation and inference," European Journal of Operational Research, Elsevier, vol. 282(3), pages 1164-1176.
    13. Tan, Yong, 2016. "The impacts of risk and competition on bank profitability in China," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 40(C), pages 85-110.
    14. Fadzlan Sufian, 2016. "Determinants of Efficiency in the Malaysian Banking Sector: Evidence from Semi-parametric Data Envelopment Analysis Method," Studies in Microeconomics, , vol. 4(2), pages 151-172, December.
    15. Jordan Kjosevski & Mihail Petkovski, 2017. "Determinants of Bank Profitability in the Republic of Macedonia – a Panel Data Analysis," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 41-65.
    16. Liu, John S. & Lu, Louis Y.Y. & Lu, Wen-Min & Lin, Bruce J.Y., 2013. "Data envelopment analysis 1978–2010: A citation-based literature survey," Omega, Elsevier, vol. 41(1), pages 3-15.
    17. Alexander Cotte Poveda, 2012. "Estimating Effectiveness of the Control of Violence and Socioeconomic Development in Colombia: An Application of Dynamic Data Envelopment Analysis and Data Panel Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 105(3), pages 343-366, February.
    18. Fadzlan Sufian & Fakarudin Kamarudin, 2014. "The impact of ownership structure on bank productivity and efficiency: Evidence from semi-parametric Malmquist Productivity Index," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-27, December.
    19. Mohsen Afsharian & Anna Kryvko & Peter Reichling, 2011. "Efficiency and Its Impact on the Performance of European Commercial Banks," FEMM Working Papers 110018, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    20. Simone Rossi & Mariarosa Borroni & Andrea Lippi & Mariacristina Piva, 2018. "Determinants of Bank Profitability in the Euro Area: What Has Changed During the Recent Financial Crisis?," International Business Research, Canadian Center of Science and Education, vol. 11(5), pages 18-27, May.

    More about this item

    Keywords

    Bioenergy industry; Cost efficiency; EU28 region;
    All these keywords.

    JEL classification:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:127:y:2018:i:c:p:746-762. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.