Money and productive efficiency - Evidence from a high-inflation country
EMERGING MARKETS FINANCE AND TRADE, vol.43, no.1, pp.64-73, 2007 (SSCI, Scopus)
- Publication Type: Article / Article
- Volume: 43 Issue: 1
- Publication Date: 2007
- Doi Number: 10.2753/ree1540-496x430103
- Journal Name: EMERGING MARKETS FINANCE AND TRADE
- Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
- Page Numbers: pp.64-73
- Keywords: high inflation, inventories, manufacturing, money demand by firms, stochastic frontier estimation, Turkey, RELATIVE PRICE VARIABILITY, REAL CASH BALANCES, UNITED-STATES, FRONTIER, LIQUIDITY, ECONOMY, MODEL
- Open Archive Collection: AVESIS Open Access Collection
- TED University Affiliated: No
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.