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Money and Productive Efficiency: Evidence from a High-Inflation Country

Author

Listed:
  • Erdem BaÅçi
  • Syed F. Mahmud
  • Eray M. Yucel

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.

Suggested Citation

  • Erdem BaÅçi & Syed F. Mahmud & Eray M. Yucel, 2007. "Money and Productive Efficiency: Evidence from a High-Inflation Country," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 43(1), pages 64-73, February.
    • Handle: RePEc:mes:emfitr:v:43:y:2007:i:1:p:64-73
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    References listed on IDEAS

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