IDEAS home Printed from https://ideas.repec.org/a/ris/apltrx/022708.html

The analysis of technical efficiency of Russian retail companies in 2019–2023

Author

Listed:
  • Galina Besstremyannaya

    (HSE University, Moscow, Russian Federation)

  • Yulia Kuznetsova

    (HSE University, Moscow; Rostov Regional Division of the Southern Main Branch of the Central Bank of the Russian Federation, Rostov-on-Don, Russian Federation)

Abstract

This paper studies the technical efficiency of Russian retail companies in 2019 to 2023 using stochastic frontier analysis (SFA) with the Battese and Coelli (1995) model. A translogarithmic production function is employed for estimations. The dependent variable is company revenue, and the production factors are the average number of employees, fixed assets, and assets less fixed assets, along with year-specific dummies. The mean distribution of the inefficiency component is modeled as a function of company age, total assets, and the regional Herfindahl–Hirschman index, calculated using a sample from the SPARK database. The results of our analysis show that labor makes the largest contribution to revenue growth, with increasing returns to scale, albeit close to constant. Revenue increased annually throughout the period under study. Average technical efficiency in the industry exhibits an inverted-U-shaped relationship with firm age and size. Technical efficiency declined significantly during the pandemic but showed steady growth in subsequent years.

Suggested Citation

  • Galina Besstremyannaya & Yulia Kuznetsova, 2026. "The analysis of technical efficiency of Russian retail companies in 2019–2023," Applied Econometrics, Russian Academy of National Economy and Public Administration (RANEPA), vol. 82, pages 26-46.
    • Handle: RePEc:ris:apltrx:022708
    as

    Download full text from publisher

    File URL: http://pe.cemi.rssi.ru/pe_2026_82_026-046.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kim, Hongbum & Ryu, Min Ho & Lee, Daeho & Kim, Jang Hyun, 2022. "Should a small-sized store have both online and offline channels? An efficiency analysis of the O2O platform strategy," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    2. Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-598, October.
    3. Elena Anatolyevna Fedorova & Bella Kemalovna Korkmazova & Maxim Alexandrovich Muratov, 2015. "Assesing the Effectiveness of Joint Companies in Russia: Industry-Specific Features," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 2, pages 47-63.
    4. Berger, Allen N. & Mester, Loretta J., 1997. "Inside the black box: What explains differences in the efficiencies of financial institutions?," Journal of Banking & Finance, Elsevier, vol. 21(7), pages 895-947, July.
    5. Perrigot, Rozenn & Barros, Carlos Pestana, 2008. "Technical efficiency of French retailers," Journal of Retailing and Consumer Services, Elsevier, vol. 15(4), pages 296-305.
    6. Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, January.
    7. Federico Belotti & Silvio Daidone & Giuseppe Ilardi & Vincenzo Atella, 2013. "Stochastic frontier analysis using Stata," Stata Journal, StataCorp LLC, vol. 13(4), pages 718-758, December.
    8. Eugenia Bessonova, 2007. "An Estimation of the Production Efficiency of Russian Industrial Firms," Applied Econometrics, Russian Academy of National Economy and Public Administration (RANEPA), vol. 6(2), pages 13-35.
    9. repec:nos:voprec:y:2016:id:217 is not listed on IDEAS
    10. Justo de Jorge & Cristina Suarez, 2007. "Efficiency Measures For Spanish Retailing Firms In A Regulated Market," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 32(1), pages 35-47, June.
    11. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    12. Hung-jen Wang & Peter Schmidt, 2002. "One-Step and Two-Step Estimation of the Effects of Exogenous Variables on Technical Efficiency Levels," Journal of Productivity Analysis, Springer, vol. 18(2), pages 129-144, September.
    13. Justo De Jorge-Moreno & Oscar Rojas Carrasco, 2015. "Technical efficiency and its determinants factors in Spanish textiles industry (2002-2009)," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(3), pages 346-357, August.
    14. Anup Kumar Bhandari & Pradip Maiti, 2007. "Efficiency of Indian Manufacturing Firms: Textile Industry as a Case Study," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 6(1), pages 71-88, April.
    15. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    16. Justo De Jorge-Moreno & Oscar Rojas Carrasco, 2015. "Technical efficiency and its determinants factors in Spanish textiles industry (2002-2009)," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(3), pages 346-357, August.
    17. Kiplangat Josea Cheruiyot, 2017. "Determinants of Technical Efficiency in Kenyan Manufacturing Sector," African Development Review, African Development Bank, vol. 29(1), pages 44-55, March.
    18. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
    19. N. Krasnopeeva & E. Nazrullaeva & A. Peresetsky & E. Shchetinin., 2016. "To export or not to export? The link between the exporter status of a firm and its technical efficiency in Russia’s manufacturing sector," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 7.
    20. repec:fth:oxesaf:96-2 is not listed on IDEAS
    21. Kyungwan Ko & Meehyang Chang & Eun-Song Bae & Daecheol Kim, 2017. "Efficiency Analysis of Retail Chain Stores in Korea," Sustainability, MDPI, vol. 9(9), pages 1-14, September.
    22. Anna Tsvetkova, 2021. "Technical efficiency trends of Russian firms in 2013–2018," Applied Econometrics, Russian Academy of National Economy and Public Administration (RANEPA), vol. 63, pages 91-116.
    23. Taye Mengistae, 1996. "Age-size effects in productive efficiency: a second test of the passive learning model," CSAE Working Paper Series 1996-02, Centre for the Study of African Economies, University of Oxford.
    24. Irina Ipatova & Аnatoly Peresetsky, 2013. "Technical efficiency of Russian plastic and rubber production firms," Applied Econometrics, Russian Academy of National Economy and Public Administration (RANEPA), vol. 32(4), pages 71-92.
    25. Sergei Golovan, 2006. "Factors Influencing the Efficiency of the Russian Banks Performance," Applied Econometrics, Russian Academy of National Economy and Public Administration (RANEPA), vol. 2(2), pages 3-17.
    26. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    27. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    28. Adugna Lemi & Ian Wright, 2020. "Exports, foreign ownership, and firm-level efficiency in Ethiopia and Kenya: an application of the stochastic frontier model," Empirical Economics, Springer, vol. 58(2), pages 669-698, February.
    Full references (including those not matched with items on IDEAS)

    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. Mai, Nhat Chi, 2015. "Efficiency of the banking system in Vietnam under financial liberalization," OSF Preprints qsf6d, Center for Open Science.
    2. Barros, Carlos Pestana & Williams, Jonathan, 2013. "The random parameters stochastic frontier cost function and the effectiveness of public policy: Evidence from bank restructuring in Mexico," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 98-108.
    3. Gangopadhyay, Partha & Jain, Siddharth & Bakry, Walid, 2022. "In search of a rational foundation for the massive IT boom in the Australian banking industry: Can the IT boom really drive relationship banking?," International Review of Financial Analysis, Elsevier, vol. 82(C).
    4. Farsi, Mehdi & Filippini, Massimo, 2009. "An analysis of cost efficiency in Swiss multi-utilities," Energy Economics, Elsevier, vol. 31(2), pages 306-315, March.
    5. Sickles, Robin C. & Song, Wonho & Zelenyuk, Valentin, 2018. "Econometric Analysis of Productivity: Theory and Implementation in R," Working Papers 18-008, Rice University, Department of Economics.
    6. Manlagnit, Maria Chelo V., 2015. "Basel regulations and banks’ efficiency: The case of the Philippines," Journal of Asian Economics, Elsevier, vol. 39(C), pages 72-85.
    7. Belotti, Federico & Ilardi, Giuseppe, 2018. "Consistent inference in fixed-effects stochastic frontier models," Journal of Econometrics, Elsevier, vol. 202(2), pages 161-177.
    8. Hakan Güneş & Dilem Yıldırım, 2016. "Estimating Cost Efficiency of Turkish Commercial Banks under Unobserved Heterogeneity with Stochastic Frontier Models," ERC Working Papers 1603, ERC - Economic Research Center, Middle East Technical University, revised Mar 2016.
    9. Marc Rohde & Christoph Breuer, 2018. "Competing by investments or efficiency? Exploring financial and sporting efficiency of club ownership structures in European football," Sport Management Review, Taylor & Francis Journals, vol. 21(5), pages 563-581, December.
    10. Duong Phuong Thao Pham & Duc Huynh & Kim-Linh Le & Thao-Anh Le, 2025. "Factors Affecting the Support of Industrial Businesses’ Performance in Vietnam’s Digital Economy," Sustainability, MDPI, vol. 17(17), pages 1-23, September.
    11. Viktoriya Galushko & Samuel Gamtessa, 2022. "Impact of Climate Change on Productivity and Technical Efficiency in Canadian Crop Production," Sustainability, MDPI, vol. 14(7), pages 1-21, April.
    12. Zarkovic, Maja, 2020. "Cap-and-trade and produce at least cost? Investigating firm behaviour in the EU ETS," Working papers 2020/12, Faculty of Business and Economics - University of Basel.
    13. Fuad, Syed & Hartarska, Valentina & Nadolnyak, Denis, 2026. "Why Beginning Farmers Differ: Scale, Community, and Productivity Dispersion in U.S. Agriculture," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404709, Agricultural and Applied Economics Association.
    14. Marko Košak & Peter Zajc & Jelena Zorić, 2009. "Bank efficiency differences in the new EU member states," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 9(2), pages 67-90, December.
    15. Ali M. Oumer & Amin Mugera & Michael Burton & Atakelty Hailu, 2022. "Technical efficiency and firm heterogeneity in stochastic frontier models: application to smallholder maize farms in Ethiopia," Journal of Productivity Analysis, Springer, vol. 57(2), pages 213-241, April.
    16. Mark A. Andor & David H. Bernstein & Stephan Sommer, 2021. "Determining the efficiency of residential electricity consumption," Empirical Economics, Springer, vol. 60(6), pages 2897-2923, June.
    17. Anna Tsvetkova, 2021. "Technical efficiency trends of Russian firms in 2013–2018," Applied Econometrics, Russian Academy of National Economy and Public Administration (RANEPA), vol. 63, pages 91-116.
    18. Ajayi, V. & Weyman-Jones, T., 2021. "State-Level Electricity Generation Efficiency: Do Restructuring and Regulatory Institutions Matter in the US?," Cambridge Working Papers in Economics 2166, Faculty of Economics, University of Cambridge.
    19. Tina Barma, 2017. "Efficiency of India’s Agricultural Exports," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 18(2), pages 276-295, September.
    20. Marin, Giovanni & Palma, Alessandro, "undated". "Technology Invention and Diffusion in Residential Energy Consumption. A Stochastic Frontier Approach," Energy: Resources and Markets 230687, Fondazione Eni Enrico Mattei (FEEM).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    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:ris:apltrx:022708. 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: Anatoly Peresetsky (email available below). General contact details of provider: http://appliedeconometrics.cemi.rssi.ru/ .

    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.