Money and productive efficiency: evidence from a high-inflation country
Date
2007Source Title
Emerging Markets Finance and Trade
Print ISSN
1540-496X
Electronic ISSN
1558-0938
Publisher
Routledge
Volume
43
Issue
1
Pages
64 - 73
Language
English
Type
ArticleItem Usage Stats
181
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198
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Abstract
This paper examines how money balances held by manufacturing firms affect their efficiency in generating sales revenue in a high-inflation economy. The analysis employs data from Turkish firms to estimate a stochastic frontier model, finding a strong positive association between the firms' money holdings and their efficiency. However, the role of money balances seems to diminish as firms hold higher raw material inventories. © 2007 M.E. Sharpe, Inc. All rights reserved.
Keywords
High inflationInventories
Manufacturing
Money demand by firms
Stochastic frontier estimation
Turkey