Technical Efficiency and Stock Market Reaction to Horizontal Mergers

This study examines the relationship between stock market reaction to horizontal merger announcements and technical efficiency levels of the participating firms. The analysis is based on data pertaining to eighty mergers between firms in the U.S. manufacturing industry during the 1990s. We employ Data Envelopment Analysis (DEA) to measure technical efficiency, which capture the firms. competence to produce the maximum output given certain productive resources. Abnormal returns related to the merger announcements provide the investor.s re-evaluation on the future performance of the participating firms. In order to avoid the problem of nonnormality, heteroskedasticity in the regression analysis, bootstrap method is employed for estimations and inferences. We found that there is a significant relationship between technical efficiency and market response. The market apparently welcomes the merger as an arrangement to improve resource utilizations.

Efficiency and Continuity in Public Finance: The Ottoman System of Taxation

Economic historians have recently emphasized the importance of integrating economic and historical approaches in studying institutions. The literature on the Ottoman system of taxation, however, has continued to adopt a primarily historical approach, using ad hoc categories of classification and explaining the system through its continuities with the historical precedent. This paper integrates economic and historical approaches to examine the structure, efficiency, and regional diversity of the tax system. The structure of the system made it possible for the Ottomans to economize on the transaction cost of measuring the tax base. Regional variations resulted from both efficient adaptations and institutional rigidities.

Are Indian Firms too Small? A Nonparametric Analysis of Cost Efficiency and Industry Structure of Indian Manufacturing

In this paper we use the 2004-05 Annual Survey of Industries data to estimate the levels of cost efficiency of Indian manufacturing firms in the various states and also get state level measures of industrial organization (IO) efficiency. The empirical results show the presence of considerable cost inefficiency in a majority of the states. Further, we also find that, on average, Indian firms are too small. Consolidating them to attain the optimal scale would further enhance efficiency and lower average cost.

Who's in Charge in the Inner City? The Conflict Between Efficiency and Equity in the Design of a Metropolitan Area

A circular metropolitan area consists of an inner city and a suburb. Households sort over the two jurisdictions based on public service levels and their costs of commuting to the metropolitan center. Using numerical simulations, we show (1) there typically exist two equilibria: one in which the poor form the majority in the inner city and the other in which the rich form the majority in the inner city; (2) there is an efficiency vs. equity trade-off as to which equilibrium is preferred; and (3) if the inner city contains only poor households, equity favors expanding the inner city to include rich households.

Productivity Growth and Efficiency in Indian Banking: A Comparison of Public, Private, and Foreign Banks

India's public sector banks (PSBs) are compared unfavorably with their private sector counterparts, domestic and foreign. This comparison rests, for the most part, on financial measures of performance, and such a comparison provides much of the rationale for privatization of PSBs.In this paper, we attempt a comparison between PSBs and their private sector counterparts based on measures of productivity that use quantities of outputs and inputs. We employ two measures of productivity: Tornqvist and Malmquist total factor productivity growth. We attempt these comparisons over the period 1992-2000, comparing PSBs with both domestic private and foreign banks. Out of a total of four comparisons we have made, there are no differences in three cases, PSBs do better in two, and foreign banks in one. To put it differently, PSBs are seen to be at a disadvantage in only one out of six comparisons. It is difficult, therefore, to sustain the proposition that efficiency and productivity have been lower in public sector banks relative to their peers in the private sector.

Liberalization, Ownership, and Efficiency in Indian Banking: A Nonparametric Approach

This paper empirically estimates and analyzes various efficiency scores of Indian banks during 1997-2003 using data envelopment analysis (DEA). During the 1990s India's financial sector underwent a process of gradual liberalization aimed at strengthening and improving the operational efficiency of the financial system. It is observed, none the less, that Indian banks are still not much differentiated in terms of input or output oriented technical efficiency and cost efficiency. However, they differ sharply in respect of revenue and profit efficiencies. The results provide interesting insight into the empirical correlates of efficiency scores of Indian banks. Bank size, ownership, and the fact of its being listed on the stock exchange are some of the factors that are found to have positive impact on the average profit efficiency and to some extent revenue efficiency scores are. Finally, we observe that the median efficiency scores of Indian banks in general and of bigger banks in particular have improved considerably during the post-reform period.

The Cell Agglutination Agent, Phytohemagglutinin-L, Improves the Efficiency of Somatic Nuclear Transfer Cloning in Cattle (Bos taurus)

One of the several factors that contribute to the low efficiency of mammalian somatic cloning is poor fusion between the small somatic donor cell and the large recipient oocyte. This study was designed to test phytohemagglutinin (PHA) agglutination activity on fusion rate, and subsequent developmental potential of cloned bovine embryos. The toxicity of PHA was established by examining its effects on the development of parthenogenetic bovine oocytes treated with different doses (Experiment 1), and for different durations (Experiment 2). The effective dose and duration of PHA treatment (150 microg/mL, 20 min incubation) was selected and used to compare membrane fusion efficiency and embryo development following somatic cell nuclear transfer (Experiment 3). Cloning with somatic donor fibroblasts versus cumulus cells was also compared, both with and without PHA treatment (150 microg/mL, 20 min). Fusion rate of nuclear donor fibroblasts, after phytohemagglutinin treatment, was increased from 33 to 61% (P < 0.05), and from 59 to 88% (P < 0.05) with cumulus cell nuclear donors. The nuclear transfer (NT) efficiency per oocyte used was improved following PHA treatment, for both fibroblast (13% versus 22%) as well as cumulus cells (17% versus 34%; P < 0.05). The cloned embryos, both with and without PHA treatment, were subjected to vitrification and embryo transfer testing, and resulted in similar survival (approximately 90% hatching) and pregnancy rates (17-25%). Three calves were born following vitrification and embryo transfer of these embryos; two from the PHA-treated group, and one from non-PHA control group. We concluded that PHA treatment significantly improved the fusion efficiency of somatic NT in cattle, and therefore, increased the development of cloned blastocysts. Furthermore, within a determined range of dose and duration, PHA had no detrimental effect on embryo survival post-vitrification, nor on pregnancy or calving rates following embryo transfer.

The Relationship between AP English Language Performance and College Outcomes

This study focused on the relationship between students’ Advanced Placement (AP) English language performance and their subsequent college success. Targeted students were divided into three groups according to their AP English Language performance. Subsequent college success was measured by students’ first-year college GPA, retention to the second year, and institutional selectivity. The demographic characteristics of the three AP performance groups with regard to gender, ethnicity, and best language spoken are provided. Results indicated that, after controlling for students’ SAT scores as a measure of prior academic performance, AP English Language performance was positively related to all three measures of college success.

Collective Voluntary Agreements and the Production of Less Polluting Products

Recently, some industries have collectively agreed not to produce models that do not meet an energy efficiency (and hence an environmental) standard. This paper presents a simple model that can be used to examine a voluntary collective agreement to limit or completely eliminate the low efficiency model of a given product (e.g., a low efficiency washing machine). We show that, when there is competition between firms, a collective agreement to limit or even eliminate production of the polluting model can actually increase profits for all firms in the industry. This suggests that a collective agreement of this type might actually be beneficial to firms, while at the same time improving environmental quality. However, the implicit enforcement that comes from the public nature of the commitment is necessary to ensure this outcome. This suggests that, by promoting such agreements, policymakers may be able to achieve substantial environmental gains with relatively little inducement. The impact on social welfare will then depend on whether these gains are sufficiently large to offset consumer losses from reductions in product variety and the associated price increases.

Labor-Use Efficiency in Indian Banking: A Branch Level Analysis

This paper uses Data Envelopment Analysis to measure labor use efficiency of individual branches of a large public sector bank with several thousand branches across India. We find considerable variation in the average levels of efficiency across the four metropolitan regions considered in this study. In this context, we introduce the concept of area or spatial efficiency for each region relative to the nation as a whole. Our findings suggest that the policies, procedures, and incentives handed down from the corporate level cannot fully neutralize the influence of the local work culture in the different regions. Most of the potential reduction in labor cost appears to be coming from possible downsizing the clerical and subordinate staff. Our analysis identifies branches that operate at very low levels of efficiency and may be gainfully merged with other branches wherever possible.