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    Rights statement: This is the author’s version of a work that was accepted for publication in International Journal of Production Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Journal of Production Economics, 246, 2022 DOI: 10.1016/j.ijpe.2022.108411

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Endogenous efficiency of the dynamic profit maximization in the intertemporal production models of venture behavior

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Endogenous efficiency of the dynamic profit maximization in the intertemporal production models of venture behavior. / Tsionas, Mike; Patel, Pankaj C.; Guedes, Maria João.

In: International Journal of Production Economics, Vol. 246, 108411, 30.04.2022.

Research output: Contribution to Journal/MagazineJournal articlepeer-review

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Tsionas M, Patel PC, Guedes MJ. Endogenous efficiency of the dynamic profit maximization in the intertemporal production models of venture behavior. International Journal of Production Economics. 2022 Apr 30;246:108411. Epub 2022 Feb 10. doi: 10.1016/j.ijpe.2022.108411

Author

Tsionas, Mike ; Patel, Pankaj C. ; Guedes, Maria João. / Endogenous efficiency of the dynamic profit maximization in the intertemporal production models of venture behavior. In: International Journal of Production Economics. 2022 ; Vol. 246.

Bibtex

@article{a8122e3508bd4ec8a7187aba10ba966b,
title = "Endogenous efficiency of the dynamic profit maximization in the intertemporal production models of venture behavior",
abstract = "How do ventures manage adjustment costs, input elasticities, and productivity growth? We draw on the intertemporal production decisions of ventures that are quasi-fixed, costly to adjust, and endogenous. Using a modified version of the Bayesian Exponentially Tilted Empirical Likelihood (BETEL) method adjusted for the presence of dynamic latent variables, the proposed moment-based multiple-equation estimation system incorporates dynamic and static optimality conditions derived from a firm's expected intertemporal profit maximization. Using reliable tax information data from a sample of 72,035 Portuguese ventures founded between 2010 and 2017, we find that the most important inputs are labor, equity, and inventories. However, the technical change is small, as is productivity growth. Ventures have a high degree of labor input elasticity but much lower elasticities for equity, inventories, capital, and advertising. The findings provide an understanding of the intertemporal behavior of ventures in managing adjustment costs, input elasticities, and productivity growth where adjustments to efficiency are “cheaper” than adjustments to capital. Labor elasticity is the highest, and productivity growth is very small.",
keywords = "Dynamic efficiency, Firms, Intertemporal decision making",
author = "Mike Tsionas and Patel, {Pankaj C.} and Guedes, {Maria Jo{\~a}o}",
note = "This is the author{\textquoteright}s version of a work that was accepted for publication in International Journal of Production Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Journal of Production Economics, 246, 2022 DOI: 10.1016/j.ijpe.2022.108411",
year = "2022",
month = apr,
day = "30",
doi = "10.1016/j.ijpe.2022.108411",
language = "English",
volume = "246",
journal = "International Journal of Production Economics",
issn = "0925-5273",
publisher = "Elsevier Science B.V.",

}

RIS

TY - JOUR

T1 - Endogenous efficiency of the dynamic profit maximization in the intertemporal production models of venture behavior

AU - Tsionas, Mike

AU - Patel, Pankaj C.

AU - Guedes, Maria João

N1 - This is the author’s version of a work that was accepted for publication in International Journal of Production Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Journal of Production Economics, 246, 2022 DOI: 10.1016/j.ijpe.2022.108411

PY - 2022/4/30

Y1 - 2022/4/30

N2 - How do ventures manage adjustment costs, input elasticities, and productivity growth? We draw on the intertemporal production decisions of ventures that are quasi-fixed, costly to adjust, and endogenous. Using a modified version of the Bayesian Exponentially Tilted Empirical Likelihood (BETEL) method adjusted for the presence of dynamic latent variables, the proposed moment-based multiple-equation estimation system incorporates dynamic and static optimality conditions derived from a firm's expected intertemporal profit maximization. Using reliable tax information data from a sample of 72,035 Portuguese ventures founded between 2010 and 2017, we find that the most important inputs are labor, equity, and inventories. However, the technical change is small, as is productivity growth. Ventures have a high degree of labor input elasticity but much lower elasticities for equity, inventories, capital, and advertising. The findings provide an understanding of the intertemporal behavior of ventures in managing adjustment costs, input elasticities, and productivity growth where adjustments to efficiency are “cheaper” than adjustments to capital. Labor elasticity is the highest, and productivity growth is very small.

AB - How do ventures manage adjustment costs, input elasticities, and productivity growth? We draw on the intertemporal production decisions of ventures that are quasi-fixed, costly to adjust, and endogenous. Using a modified version of the Bayesian Exponentially Tilted Empirical Likelihood (BETEL) method adjusted for the presence of dynamic latent variables, the proposed moment-based multiple-equation estimation system incorporates dynamic and static optimality conditions derived from a firm's expected intertemporal profit maximization. Using reliable tax information data from a sample of 72,035 Portuguese ventures founded between 2010 and 2017, we find that the most important inputs are labor, equity, and inventories. However, the technical change is small, as is productivity growth. Ventures have a high degree of labor input elasticity but much lower elasticities for equity, inventories, capital, and advertising. The findings provide an understanding of the intertemporal behavior of ventures in managing adjustment costs, input elasticities, and productivity growth where adjustments to efficiency are “cheaper” than adjustments to capital. Labor elasticity is the highest, and productivity growth is very small.

KW - Dynamic efficiency

KW - Firms

KW - Intertemporal decision making

U2 - 10.1016/j.ijpe.2022.108411

DO - 10.1016/j.ijpe.2022.108411

M3 - Journal article

VL - 246

JO - International Journal of Production Economics

JF - International Journal of Production Economics

SN - 0925-5273

M1 - 108411

ER -