Merwe Oberholzer

An empirical study on measuring efficiency and profitability of bank regions

According to the invention, there is provided a hybrid maize plant, designated as 3568, produced by crossing two Pioneer Hi-Bred International, Inc. proprietary inbred maize lines. This invention relates to the hybrid seed 3568, the hybrid plant produced from the seed, and variants, mutants, and trivial modifications of hybrid 3568.

An Investigation of the Economic Performance of Sustainability Reporting Companies Versus Non-reporting Companies: A South African Perspective

Abstract This study explores the potential differences in the economic performances of companies that report on their sustainability information and those companies that do not report thereon. Even though there have been similar studies conducted in 1st world countries, this is the first study of its kind in a developing economy, and considers the economic performances of South African publicly listed companies. Annual performance data, from 2002 to 2009, for the two groups of companies was taken from the McGregor BFA database. The significance of the average differences between key financial indicators of the test-group and the control-group was determined by the t-test, while the difference of positive or negative Economic Value Added and Market Value Added values between these two groups was also evaluated. Even though some evidence indicates that companies that disclose sustainability reports may experience better economical performance, the statistical analysis could not confirm a definite positive relationship between sustainability reporting and economic performance.

Estimating technical and scale efficiency in banks and its relationship with economic value added: A South African study

This study used monthly balance sheet data, annual financial statement reports as well as other relevant data to calculate the technical and scale efficiency estimates (determined by Data Envelopment Analysis (DEA)) as well as the performance measurement of economic value added (EVA) for three of the major banks in South Africa. The main purpose of the study was to determine, by means of multiple regression analysis, whether changes in the efficiency estimates lead to changes in the EVAs of the banks. This study found that the overall regression model is statistically significant for only one of the three banks.

Estimating the Efficiency of Sustainable Development by South African Mining Companies

Abstract The purpose of the study was to develop a model, using data envelopment analysis (DEA), in order to estimate the relative efficiency of nine South African listed mining companies in their efforts to convert environmental impact into economic and social gains for shareholders and other stakeholders. The environmental impact factors were used as input variables, that is, greenhouse gas emissions, water usage and energy usage, and the gains for shareholders and other stakeholders were used as output variables, that is, number of employees, taxes, donations, dividends and reinvestments. The study found substantial differences between the relative efficiency of gold-mining companies and the efficiency of all the other mining companies, where gold-mining companies were the most inefficient to convert their environmental impact into economic and social gains. The practical implication is that gold-mining companies should use the coal-and platinum-mining companies indicated in this study as a benchmark for best practice in sustainable development. Further research is recommended, that is, since more companies are willing to report on their environmental impact, a similar study should be conducted to include more mining companies from different sectors. This will allow a greater discrimination between the companies due to the larger quantity of data and a better comparison can be made between mining companies in the different mining sectors.

Towards a new model to benchmark firms’ operating efficiency: A data envelopment analysis approach

The purpose of the study was to construct two similar data envelopment analysis (DEA) models. The first contains only published accounting-based data and the second added weighted average cost of capital (WACC), a primary market-based determinant, as an input variable. The efficiency scores of firms according to the two models are compared to determine whether there is a significant difference between the two models’ results. In total, 206 company years were analysed. This includes all the manufacturing firms which published financial statements on the Johannesburg Security Exchange (JSE) from 2011 to 2013. The study found that there is a good chance that the efficiency score of a firm will be significantly lower when WACC is added as a variable. Therefore, ignoring WACC in a general benchmarking DEA model may provide a misleading, too optimistic, sugar-coated answer to firms’ managers with regard to their firms’ relative operating efficiency. The study contributes to the existing body of literature by revealing evidence that WACC is an important component in a DEA model that aims to benchmark firms’ operating efficiency. Therefore, accounting-based data should be used in conjunction with WACC, a primary market-based determinant, which adds a further dimension to the benchmarking model.

Estimating technical and scale efficiency of red meat production: a South African case study

Abstract The purpose of the study is to use data from a case study to build a data envelopment analysis (DEA) model to compare the financial performances of South African boer goat with cattle and sheep production, respectively. Data was collected by calculating the financial performance, which is broken up into six measurements. These measurements formed the output variables and various levels of capital employed were used as the input variable to determine the technical and scale efficiencies of the comparative red meat product lines. Data was developed for 65 different scenarios, resulting in a total of 455 data points. The study firstly concludes that South African boer goat production outperforms cattle and sheep production financially, and secondly, that it is easier for sheep production to operate at a scale that maximises productivity, followed by South African boer goat and then cattle production.

A Note: Estimating the relationship between environmental performance and economic performance of South African mining companies

The purpose of the study is to determine the relationship between environmental performance and economic performance in the South African mining industry, where the economic performance consists of market-based and accounting-based estimates. In this regard, Spearman’s ranking-order correlation was applied. The study found that there is some contradiction in the direction of the relationship between accounting-based estimates and market-based estimates and their relationship with environmental performance. Furthermore, there is some contradiction in the direction of the relationship between economic performance and the environmental performance of the different mining sectors. The main limitation is that only a limited number of mining companies reported on environmental-related issues. Only ten mining companies provided sufficient annual data over a five-year period. The contribution of this study is that it pointed out that causation can be argued both ways between environmental performance and economic performance. When a change in the environmental performance influences the economic performance, it can be determined whether it does/does not pay to be green. This one-sided view, used in previous studies, presents probably only half of the bigger picture.

A model to compare firms’ efficiency in creating shareholders’ value

The first objective of this study is to develop a Data Envelopment Analysis (DEA) model to determine the relative technical efficiency of firms to create shareholders’ value. The second objective is to compare the technical efficiency with the profit ratios in the Du Pont analysis to determine whether there are some consistencies between these two measures of performance. Data of 33 JSE Limited listed manufacturing companies were used over a five-year period. The study found that there is a significant monotone dependence between the annual technical efficiency and the return on equity of companies. The practical implication of the study is that it provides a functional model that indicates an aggregated judgement of a firm’s efficiency of using resources to create shareholders’ value, and, the readily available return on equity can be used as a substitute to technical efficiency, which is more complicated to calculate. The value of this study is that it is the first to apply a unique DEA model for profit-motive companies.