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Corporate Governance and Firm’s Efficiency: The Case of a Transitional Country, Ukraine

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Abstract

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 Leibenstein’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 Estimation and influence in two stage, semi-parametric models of production process, Simar and Zelenyuk (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 seven industries in Ukraine.

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Authors and Affiliations

  1. Institut de Statistique, Université Catholique de Louvain, 20 voie du Roman Pays, B 1348, Louvain-la-Neuve, Belgium

    Valentin Zelenyuk

  2. UPEG (Ukrainian Productivity and Efficiency Group), EROC of EERC-Kiev at the National University “Kyiv-Mohyla Academy”, Kiev, Ukraine

    Valentin Zelenyuk & Vitaliy Zheka

  3. Lviv Academy of Commerce, k. 317, Brativ Tershakivtciv st. 2a, Lviv, 79005, Ukraine

    Vitaliy Zheka

Authors
  1. Valentin Zelenyuk
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  2. Vitaliy Zheka
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Corresponding author

Correspondence to Valentin Zelenyuk.

Additional information

“The entrepreneurship structure itself may be critical, with the classic issue of the separation of ownership from control being regarded as one of the earliest and most important sources of X-efficiency” (Button and Weyman-Jones, 1992, American Economic Review).

We would like to dedicate this paper to the memory of Christos Panzios—co-editor who handled our paper to almost the very end, whose suggestions and encouragement have helped us substantially improve our paper.

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Zelenyuk, V., Zheka, V. Corporate Governance and Firm’s Efficiency: The Case of a Transitional Country, Ukraine. J Prod Anal 25, 143–157 (2006). https://doi.org/10.1007/s11123-006-7136-8

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  • DOI: https://doi.org/10.1007/s11123-006-7136-8

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