Profit-sharing, Technical Efficiency Change and Finance Constraints
This paper analyses the mechanisms through which profit-sharing schemes may induce debt constrained firms to improve technical efficiency over time to guarantee positive profits. This hypothesis is first formalised in a partial equilibrium framework and then is tested on a sample of Italian traditional and cooperative firms. Technical efficiency change indexes are computed by DEA. These are regressed on a measure of finance constraints to analyse their impact on firms' efficiency growth. The results support the hypothesis that a restriction in the availability of financial resources can affect positively the growth in efficiency in firms with profit-sharing schemes.
|Date of creation:||21 May 2004|
|Date of revision:|
|Note:||Type of Document - pdf. Tables and Figure 1 are in two separate (pdf) files|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
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