Determinants of Technical Inefficiency of Saccos in Kenya: A Net Operating Cash Flows Output Slack Analysis

Leonard Rang’ala Lari, Philip Mulama NYangweso and Lucy Jepchoge Rono

Asian Journal of Economics and Empirical Research, 2017, vol. 4, issue 2, 49-60

Abstract: Purpose: The purpose of this study was to evaluate the determinants of technical inefficiency of Saccos in Kenya. Methodology: The explanatory research design was utilized. The financial statements data was collected from a census of 46 audited deposit taking Saccos and methods used included estimation of technical inefficiency by employing a non-parametric DEA method while the second step concerned determination of inefficiency using parametric SFA. The log truncated panel data was used for a period of 8 years (2007-2014). Result: All the predictors jointly influence inefficiency and are significant except for prime regressors given NOCF slack as hypothesized in agency, efficiency and intermediation theories. NOCF slack regression reflects lack of managerial influence as indicated by Gamma (1.13E-23) while DEA result of all Saccos indicated 0.976 mean efficiency. Contribution to policy and practice: The NPTA, CA and FI predictors had significant influence on pure technical inefficiency, thus apt for decision making.

Keywords: Saccos in Kenya; Technical inefficiency; Net operating cash flows (NOCF) Output slack. (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://asianonlinejournals.com/index.php/AJEER/article/view/230/207 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aoj:ajeaer:v:4:y:2017:i:2:p:49-60:id:230

Access Statistics for this article

More articles in Asian Journal of Economics and Empirical Research from Asian Online Journal Publishing Group
Bibliographic data for series maintained by Sara Lim ().