Derek Jones, Irma M. and Robert D. Morris Professor of Economics, with Evis Sinani and Niels Mygind, has published an article in Corporate Ownership & Control (Volume 5, Issue 3, 2008). "Determinants of Firm-level Technical Efficiency: Evidence Using a Stochastic Frontier Approach" investigates the determinants and dynamics of firm efficiency using a representative sample of Estonian firms for the period 1993-1999.
The authors were able to address problems that plagued previous work, such as the endogeneity of ownership. Their findings were that foreign ownership increases technical efficiency and firm size and higher labor quality enhance efficiency, while soft budget constraints adversely affect efficiency. They also established that Estonian firms operate under constants returns to scale and the percentage of firms operating at high levels of efficiency increases over time. Their findings provide support for hypotheses that a firm's ownership structure and its characteristics such as firm size, labor quality, soft budget constraints and time of privatization are important for its technical efficiency.
Jones is currently a visiting professor at the Helsinki School of Economics and is funded in part by a fellowship from the Finnish Foundation for Education.
The authors were able to address problems that plagued previous work, such as the endogeneity of ownership. Their findings were that foreign ownership increases technical efficiency and firm size and higher labor quality enhance efficiency, while soft budget constraints adversely affect efficiency. They also established that Estonian firms operate under constants returns to scale and the percentage of firms operating at high levels of efficiency increases over time. Their findings provide support for hypotheses that a firm's ownership structure and its characteristics such as firm size, labor quality, soft budget constraints and time of privatization are important for its technical efficiency.
Jones is currently a visiting professor at the Helsinki School of Economics and is funded in part by a fellowship from the Finnish Foundation for Education.
