Leverage, technical efficiency, and profitability: An application of DEA to foreign-invested toy manufacturing firms in China

Mok, Vincent, Yeung, Godfrey, Han, Zhaozhou and Li, Zonhzhang (2007) Leverage, technical efficiency, and profitability: An application of DEA to foreign-invested toy manufacturing firms in China. Journal of Contemporary China, 16 (51). pp. 259-274. ISSN 1067-0564

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Abstract

Based on a representative sample of the 238 largest foreign-invested toy manufacturing firms in southern China by output value, we adopted a two-stage approach to examine the role of leverage on firm performance as measured by technical efficiency, and the effect of efficiency on profitability. In the first stage, we use data envelopment analysis (DEA) to estimate the technical efficiency of the sample firms. In the second stage, we conduct a regression analysis to study the effects of leverage on efficiency and of efficiency on profitability. Our empirical results support the view that leverage has a positive effect on firm technical efficiency and that there is a positive relationship between technical efficiency and profitability

Item Type: Article
Schools and Departments: School of Global Studies > Geography
Depositing User: Godfrey Yeung
Date Deposited: 28 Jan 2013 12:21
Last Modified: 28 Jan 2013 12:21
URI: http://sro.sussex.ac.uk/id/eprint/11295
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