Productive Efficiency And Optimal Firm Size:The Case Of US Health Services Industry

American Journal of Health Sciences

Adam Bouras¹  Abhirjun Dutta²  David Bouras²  Felix Edoho²  Emmanuel Ajuzie²  Roberto Ike³  Aloyce Kaliba⁴ 

[1] Graduate Student, University of Missouri-Columbia;Lincoln University;M College;Southern University and A&University of California, Davis Medical Center

关键词: Productive Efficiency;    Optimal Firm Size;    Health Services Industry;    Market Capitalization;   

DOI  :  10.19030/ajhs.v2i2.6632

学科分类：医学（综合）

来源: Clute Institute for Academic Research

【 摘 要 】

This paper examines the link between firm size and productive efficiency. In so doing, it attempts to determine optimal firm sizes in terms of market capitalization and total asset thereby allowing firms to achieve higher level of productive efficiency. The results indicate that the optimal firm size in terms of market capitalization is $13.1 billion. In terms of total asset, the optimal firm size is $10.3 billion. The results also suggest that there is a threshold above which an increase in firm size adversely affects the level of productive efficiency. The results have important implications for managerial policies regarding firm restructuring. To achieve higher productive efficiency, smaller firms have to pursue expansion strategies through mergers and acquisitions. Larger firms, on the other hand, have to pursue divestment strategies to reduce the size of their assets, particularly by refocusing on core competencies.

【 授权许可】

CC BY