EconStor >
Max-Planck-Institut für Ökonomik, Jena >
Discussion Papers on Entrepreneurship, Growth and Public Policy, MPI für Ökonomik >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/19967
  
Title:Governance structures, efficiency and firm profitability PDF Logo
Authors:Lehmann, Erik E.
Warning, Susanne
Weigand, Jürgen
Issue Date:2004
Series/Report no.:Papers on entrepreneurship, growth and public policy 2204
Abstract:Using a panel data set of 361 German corporations for the period 1991 to 1996 we test the hypothesis that firms with more efficient governance structures have higher profitability. To determine efficiency we compare firms with respect to ownership concentration, the identity of owners, capital structure, investment and firm growth by a multi-input/multi-output Data Envelopment Analysis (DEA). This non -parametric linear programming technique considers both multiple in- and outputs. Based on the concept of pareto efficiency, it computes an efficiency score where the associated weights of the inputs and outputs are determined endogenously. The DEA efficiency scores are then used as explanatory variables in panel data regressions of profitability. Our main finding is that the efficiency scores indeed contribute significantly to explaining profitability differences between firms, even after controlling for industry effects and unobserved systematic firm effects.
Subjects:firm performance
ownership concentration
owner identity
managerial discretion
JEL:G3
L1
Document Type:Working Paper
Appears in Collections:Discussion Papers on Entrepreneurship, Growth and Public Policy, MPI für Ökonomik

Files in This Item:
File Description SizeFormat
2004-22.pdf452.55 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/19967

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.