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Profit-sharing, Technical Efficiency Change and Finance Constraints

Author

Listed:
  • Ornella Maietta

    (University of Naples, Italy)

  • Vania Sena

    (University of Leeds, UK)

Abstract

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.

Suggested Citation

  • Ornella Maietta & Vania Sena, 2004. "Profit-sharing, Technical Efficiency Change and Finance Constraints," Microeconomics 0405006, EconWPA.
  • Handle: RePEc:wpa:wuwpmi:0405006
    Note: Type of Document - pdf. Tables and Figure 1 are in two separate (pdf) files
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/mic/papers/0405/0405006.pdf
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    Cited by:

    1. Fakhfakh F. & Perotin V. & Gago M., 2009. "Productivity, Capital and Labor in Labor-Managed and Conventional Firms," Working Papers ERMES 0910, ERMES, University Paris 2.
    2. D'Alessio, Massimiliano & Maietta, Ornella Wanda, 2008. "The Determinants Of Innovation In The Italian Food Industry: The Role Of R&D Networking," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44856, European Association of Agricultural Economists.

    More about this item

    Keywords

    Finance Constraints; Technical Efficiency and Profit Sharing;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D2 - Microeconomics - - Production and Organizations
    • D3 - Microeconomics - - Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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