IDEAS home Printed from https://ideas.repec.org/a/eee/beexfi/v3y2014icp41-51.html
   My bibliography  Save this article

Transport firms’ inefficiency and managerial optimism: A stochastic frontier analysis

Author

Listed:
  • Jarboui, Sami
  • Forget, Pascal
  • Boujelbene, Younes

Abstract

This paper presents an original essay that explains the correlation between transport firms’ technical efficiency and managerial optimism. We initiate a debate concerning the potential role of Chief Executive Officers’ (CEO) irrationalities in explaining the inefficiency of public transport operators, such as the shortfall between the optimal production function and the observed production level. Stochastic frontier analysis (SFA) methods are applied to our sample over a twelve-year period from 2000 to 2011, where we aim to detect the potential effect of a well-documented bias in behavioral economic and finance theory: the managerial optimism bias. Using two proxies of managerial optimism based on the 2005 work of Malmendier and Tate as well as following recommendations of cognitive psychology and using an SFA approach, we find strong evidence of the negative impact of CEOs’ optimism bias on transport firms’ technical efficiency, meaning that managerial optimism decreases transport firms’ technical efficiency.

Suggested Citation

  • Jarboui, Sami & Forget, Pascal & Boujelbene, Younes, 2014. "Transport firms’ inefficiency and managerial optimism: A stochastic frontier analysis," Journal of Behavioral and Experimental Finance, Elsevier, vol. 3(C), pages 41-51.
  • Handle: RePEc:eee:beexfi:v:3:y:2014:i:c:p:41-51
    DOI: 10.1016/j.jbef.2014.07.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2214635014000409
    Download Restriction: no

    File URL: https://libkey.io/10.1016/j.jbef.2014.07.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mária Ďurišová & Emese Tokarčíková & Florina Oana Virlanuta & Zuzana Chodasová, 2019. "The Corporate Performance Measurement and Its Importance for the Pricing in a Transport Enterprise," Sustainability, MDPI, vol. 11(21), pages 1-17, November.

    More about this item

    Keywords

    Transport firm; Technical efficiency; Stochastic frontier analysis; Managerial optimism;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:beexfi:v:3:y:2014:i:c:p:41-51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-behavioral-and-experimental-finance .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.