Journal of Management Research
Volume 9, Number 1 (April 2009)
ISSN: 0972-5814 Online ISSN: 0974-455X
Cost Efficiency of Listed Electronics- Information Firms in China
Xue-Jie Bai, Jin-Li Ho and Wen-Ling Liu
| Abstract |
This research studies twenty listed electronics-information firms in China during the period 2001 to 2005 and applies Battese and Coelli’s (1995) model of a stochastic frontier function to compute the cost inefficiency scores. Simultaneously it also evaluates the influence on cost efficiency of R&D expenditure, scale and management model of the firms. All nominal variables in monetary units have been deflated into real variables at 2001 prices. Our empirical results are summarized as follows: The average cost efficiency of Chinese listed electronics-information firms is very low. R&D expenditure significantly improves cost efficiency. The scale of a firm significantly worsens cost efficiency, showing dis-economies of scale. Operational diversification significantly improves cost efficiency, showing economies of scope.
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