Profit sharing, technical efficiency change and finance constraints

Maietta, Ornella W. and Sena, Vania (2004). Profit sharing, technical efficiency change and finance constraints. IN: Employee participation, firm performance and survival. Perotin, Virginie and Robinson, Andrew (eds) Advances in the economic analysis of Pparticipatory & labor-managed firms . Emerald.

Abstract

This paper analyses the mechanisms through which profit-sharing schemes may induce debt constrained firms to improve technical efficiency over time to guarantee positive profits. This hypothesis is first formalised in a partial equilibrium framework and then is tested on a sample of Italian traditional and cooperative firms. Technical efficiency change indexes are computed by DEA. These are regressed on a measure of finance constraints to analyse their impact on firms’ efficiency growth. The results support the hypothesis that a restriction in the availability of financial resources can affect positively the growth in efficiency in firms with profit-sharing schemes.

Publication DOI: https://doi.org/10.1016/S0885-3339(04)08007-X
Divisions: Aston Business School > Economics finance & entrepreneurship
Aston Business School
Uncontrolled Keywords: profit-sharing schemes,debt constrained firms,technical efficiency,positive profits,partial equilibrium framework,Italian,traditional firms,cooperative firms,efficiency growth
Full Text Link: http://www.emer ... 3&show=abstract
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Published Date: 2004
Authors: Maietta, Ornella W.
Sena, Vania

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