Corporate Governance and Firm's Efficiency: The Case of a Transitional Country, Ukraine
Journal of Productivity Analysis, Vol. 25, No. 1, pp. 143-157, 2006
UCL Discussion Paper No. 0429
24 Pages Posted: 3 Mar 2006
In this study, we look for empirical support for the hypothesis that there is a positive relationship between the levels of corporate governance quality across firms and the relative efficiency levels of these firms. This hypothesis is related to Liebenstein's idea of X-efficiency. We use the data envelopment analysis (DEA)estimator to obtain proxies for X-[in]efficiency of firms in our sample and then analyze them with respect to different ownership structures by comparing distributions and aggregate efficiencies across different groups. We also use truncated regression with bootstrap, following Simar and Wilson (2003), to infer on relationship of inefficiency to various indicators of quality of corporate governance, ownership variables, as well as industry and year specific dummies. The data is coming from 7 industries in Ukraine.
Keywords: corporate governance, ownership structure, data envelopment analysis, Liebenstein, X-efficiency, efficiency, Ukraine
JEL Classification: G32, G34, C24, D24, G30, P27
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