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

Bulletin of Applied Economics, 2020, vol. 7, issue 1, 95-105

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.

Keywords: Productivity; Firm’ production; Efficiency; Market value; Microeconomic analysis (search for similar items in EconPapers)
JEL-codes: C14 D24 M21 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rmk:rmkbae:v:7:y:2020:i:1:p:95-105

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