Methodological approaches to assessment of the efficiency of business entities activity

Olena Pakhnenko, Olga Liuta and Nataliya Pihul

Business and Economic Horizons (BEH), 2018, vol. 14, issue 1, 143-151

Abstract: The management of stable development of business entities requires the improvement of methodological approaches regarding their efficiency assessment. We think that the efficiency assessment should conduct a comparative analysis with other economic entities regarding the effectiveness of using existing amount of material, financial and labor resources. For a comparative assessment of the operational efficiency of Ukrainian enterprises authors suggested the method of frontier stochastic analysis. The essence of this approach is to build a standard enterprise with the highest efficiency indicators and calculation of the efficiency coefficients. According to the results of statistical hypotheses testing it is determined that the translog function with the truncated distribution of a random component best describes the investigated functional dependences. According to the results of modeling the efficiency coefficients for every enterprise and period of investigation were received and on the basis of them the ranking of enterprises efficiency was made.

Keywords: Efficiency; profitability; enterprise; stochastic analysis; frontier analysis (search for similar items in EconPapers)
JEL-codes: C14 G30 G32 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:pdc:jrnbeh:v:14:y:2018:i:1:p:143-151

DOI: 10.15208/beh.2018.12

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