EMERGING MARKETS FINANCE AND TRADE, vol.43, no.1, pp.64-73, 2007 (SSCI)
Article / Article
EMERGING MARKETS FINANCE AND TRADE
Social Sciences Citation Index (SSCI), Scopus
high inflation, inventories, manufacturing, money demand by firms, stochastic frontier estimation, Turkey, RELATIVE PRICE VARIABILITY, REAL CASH BALANCES, UNITED-STATES, FRONTIER, LIQUIDITY, ECONOMY, MODEL
TED University Affiliated:
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.