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The effect of foreign ownership on SMEs performance: An efficiency analysis perspective

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Abstract

This paper uses both Data Envelopment Analysis (DEA) and Free Disposal Hull (FDH) models in order to determine different performance levels in a sample of 353 foreign equities operating in the Greek manufacturing sector. Particularly, convex and non-convex models are used alongside with bootstrap techniques in order to determine the effect of foreign ownership on SMEs’ performance. The study illustrates how the recent developments in efficiency analysis and statistical inference can be applied when evaluating performance issues. The analysis among the foreign equities indicates that the levels of foreign ownership have a positive effect on SMEs’ performance.

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Notes

  1. We consider here only the VRS case; however CRS can be obtain by dropping the constraint in (5) requiring γs to sum to one.

  2. ICAP directory provides financial data (based on published accounts) for all Plc. and Ltd. firms operating in Greece. http://www.icap.gr/isologismoi/intro/login/index.asp.

  3. According to EU definition of firm size, small and medium firms are those with less than 249 employees.

  4. All the results obtained from BCC model are available upon request.

  5. All the results obtained under the CRS and FDH assumption are available upon request.

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Acknowledgments

We would like to thank Professor Paul W. Wilson and one anonymous reviewer for their useful and constructive comments on earlier versions of this article. Any remaining errors are solely the authors’ responsibility.

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Authors and Affiliations

  1. Department of Economics, University of Thessaly, Korai 43, 38333, Volos, Greece

    George Emmanuel Halkos & Nickolaos G. Tzeremes

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  1. George Emmanuel Halkos
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  2. Nickolaos G. Tzeremes
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Correspondence to George Emmanuel Halkos.

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Halkos, G.E., Tzeremes, N.G. The effect of foreign ownership on SMEs performance: An efficiency analysis perspective. J Prod Anal 34, 167–180 (2010). https://doi.org/10.1007/s11123-010-0174-2

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