PRODUCTIVITY AND PRICES: HOW AND WHY DO THEY RELATE?
THE CASE OF PORTUGUESE LISTED COMPANIES
Miguel Matos Torres
Leonor Fernandes Ferreira
This is a first draft please do not quote without authors permission
ABSTRACT
Productivity and profitability ratios are used by managers as proxies to
measure the efficiency of a company. The relationship between prices and
return or income variables has been widely analysed while the relationship
between prices and productivity or value added variables could scarcely be
found in the literature review.
The purpose of this paper is to analyse the relationship between productivity
and prices and to understand the factors underlying it.
Our sample includes companies listed in the Portuguese Stock Exchange,
covers the period between 1996 and 2000 and uses annual and semi-annual
data, collected from DATHIS – Portuguese Stock Exchange Databases – and
report of companies.
The analysis is conducted on the basis of econometric models, namely
regression analysis and data is processed with SPSS. The results indicate that
the relation between prices and productivity variables is positive, although
weak.
The paper finalises discussing the possible reasons underlying the fact that
despite productivity being used by managers it is not perceived or appreciated
by investors.
RESUMO
Os rácios de produtividade e rendibilidade são usados pelos gestores como
forma de medir eficiência de uma empresa. A relação entre preço e variáveis
de rendimento ou lucro já foi largamente analisado enquanto a relação entre
preços e variáveis como
produtividade ou valor acrescentado foi
escassamente encontrada na revisão da literatura.
O objectivo deste artigo é analisar a relação entre produtividade e preço e
compreender os factores que lhe estão subjacentes.
A amostra inclui empresas cotadas na Bolsa de Valores Portuguesa,
abrangendo o período entre 1996 e 2000 com dados anuais e semestrais,
recolhidos na DATHIS – Portuguese Stock Exchange Databases – e dos
relatórios das empresas.
A análise é conduzida com base em modelos econométricos,
nomeadamente análise de regressão e os dados são processados com o
SPSS. Os resultados indicam que a relação entre as variáveis preço e
produtividade é positiva, ainda que fraca.
O artigo termina discutindo as possíveis razões subjacentes ao facto de a
variável produtividade não ser utilizada pelos gestores e não ser percebida ou
apreciada pelos investidores.
1
1. INTRODUCTION
Productivity and profitability ratios are used by managers as proxies to
measure the efficiency of a company. The relationship between prices and
return or income variables has been widely analysed while the relationship
between prices and productivity or value added variables could scarcely be
found in the literature review.
The purpose of this paper is to analyse the relationship between productivity
and prices and to understand the factors underlying it.
When analysis a company an investor searches for the maximum of
information possible to be efficient in his decisions. However faces two
constraints: the time is limited and the information has a price. Thus investors
use profitability indicators.
The efficiency can be quantified through various indicators such as
productivity, profitability, stability, quality or the sociability. This paper deals with
productivity measures.
The productivity relates production output with the factors used in a
production process. In this way, to obtain a larger production using the same
amount of work, capital and of other factors, means to increase productivity.
When this verifies a positive effect is generated in the economic dynamic.
This effect is pursued continually, although unconsciously, in several fields
of knowledge and for there are several times for the humanity. Being
productivity is many times expressed by other terms such as: fecundity, fertility
or profitability.
The productivity is often referred with base in indicators. Lopes (1998) has
proposed taxonomy of the productivity indicators, according to the two
classifications - Type A and Type B - another classification is increased
designated by Type C, as shown in the Table 1.
Table 1–Types of the Productivity
Classification
Approach
Type A
The set is in the inputs where appear the
partial, total indicators, total of the factors and
multi-factor.
Type B
Type C
Keeps in mind if the construction of the
indicator reflect or not the temporary
evolutions of the productivity, here meets two
types of indicators, designated them static and
the dynamic ones.
The total productivity is considered to create
general indicators as the medium productivity
and the marginal productivity.
The introduction is constituted by seven parts, the first studies the
productivity in absolute terms, the second part analyses productivity of the work,
the third the productivity of the capital factor, the fourt part analyses the
2
productivity of another factors that not the capital and the work, the fifth part
studies the total productivity of the factors, the sixth part it presents the marginal
productivity and the medium productivity, finally the seventh part refers the
advantages and limitations of the productivity as efficiency measure.
1.1 PRODUCTIVITY
The productivity of a company depends on several factors related with the
production. Some of those factors such as the general level of the search, the
fiscal politics, the interest rate, the situation of the market of the raw materials,
the abundance or the lack of qualified labour escape to the control of the
managers of the companies. To the opposite, other productivity factors, which
managers can manipulate, are work and capital.
The productivity is defined as the relationship between a value or produced
amount of goods and services (Q) and the factors which have been used to
obtain that production. These factors necessary to produce a good or service
are labour (W), capital (C) and others factors (Z). The value of all the three
factors used to obtain Q is designated for  (W , C, Z ) . That is to say, the sum of
the values of whole the labour, of the whole capital and " other " necessary
ones to reach Q.
Formalizing, the productivity (PW, C, Z) of a period may be obtained as division of
the value of Q for the sum of the value of the factors used  (W , C, Z ) .
Q
 (W ; C; Z )
That is:
(PW, C, Z) =
Or,
Q = (PW, C, Z)*  (W , C, Z )
The total productivity assumes the multiplier form alternatively. That is,
production depends on the productivity of multiplicative form, being
productivity a relative measure.
Associated to each factor there are the respective productivities namely,
productivity of the labour (PW), the productivity of the factor (PC) and
productivity of other factors (PZ).
(1)
(2)
the
the
the
the
1.2 LABOUR’S PRODUCTIVITY
The productivity of labour can be calculated having a quantification of the
labour uses in a production, for example in number of hours or in costs (wages),
The productivity of the work is the indicator more often used in the
quantification of the productivity. Reasons for that are namely, the importance of
labour in the operating costs, for this factor to be that moves the remaining ones
and for being more easily measurable than the generality of the factors.
Besides, the measures takings for the improvement of the productivity of the
work drive directly or indirectly to improvements in the revenue of another
factors.
Labour’s Productivity (PW) varies due to of several variables, the quality of
education being one of them. Making the comparison between a given Q and
3
the amount of necessary W to obtain Q. This definition is called by Physical
Productivity of the Labour (PFT). That is, PFT.
Like this:
PFT =
Q
WF
(3)
However, when comparing among companies or different countries it is used
with larger frequency the productivity in value of the work (PVW), where the
value added by the factor work (VAW) is given by the product of PVW for W.
That is:
VAW = PVW * W
Or,
PVW =
VAW
W
(4)
(5)
From expression (5) it is verified that as smaller the value of W uses, as
larger VAW bigger will be PVw.
However, the definition doesn't take in bill line the duration of the work,
which can vary from individual to individual or from section to section. To
alleviate this, productivity of the labour (PHW)per hours should be measured
allowing permitted this way to comparisons.
PHT is calculated dividing VAW for the number of hours you use to obtain Q
(H).
VAW
It’s considered:
PHW =
(6)
H
Expression (6) can be substituted for other, in case there is information
about of the average duration of the individual work (DIAW) and the number of
workers (WN). The total number of working hours results from the multiplication
of DIAW for W and thus:
VAW
PHW =
(7)
WN * DIAW
This approach allows to identify the most productive units in contributing to
Q
When a company produces several types of products, to calculate the
productivity in value of W for product [PVW (i)], it is considered the existence of a
value added by the factor labour by product [VAW (i)].
Thus, VAW (i) it is the same to the product of PVW (i) for the value of factor
work it uses in the production of the product i (W i).
That is:
VAW(i)= PVW(i) *Wi.
Or :
PVW(i) =
VAW ( i )
Wi
(8)
(9)
4
1.3 PRODUCTIVITY OF CAPITAL
Supposing two bank agencies each with the same number of employees
and with the increased of all the factors identical value [VA (W, C, Z)] tends same
(PW, C, Z). Being given the case of a to have more modern equipments than they
provide better results than the other, the workers won't certainly have the same
productivity in both agencies.
In the agency where equipments are older and, thus, supposed to be less
efficient, the intensity of the collaborator’s task is more important of here than
the productivity of another factor, the productivity of the capital factor appears
(PC).
To obtain PC, we consider that VAC is the same to the product of PC for the
value of C.
That is:
VAC = PC * C
That is to say:
PC =
VAC
C
(10)
(11)
The expression (11) it can be affirmed that as smaller the value of C uses as
larger VAC bigger will be PC, ceteris paribus. If it maintains her C and to
increase VAC, PC will increase. On contrary if it maintains her VAC and to be
reduced C, PC will also increase.
1.4 PRODUCTIVITY OF OTHER FACTORS
Other factors termed non-W or C can increase VA (W, C, Z). Examples are the
innovation, the administration skills and organization.
To calculate the productivity of those other factors (PZ) it is considered that
the value added by other factors non T or C (VA Z) is equal to the product of PZ
for the value of Z.
That is:
VAO = PO * O
(12)
That is to say:
PO =
VAO
O
(13)
According to expression (13), the smaller the value uses of another factors
that non-T or C, the larger VAZ adult will be PZ.
1.5 TOTAL PRODUCTIVITY (OF FACTORS)
The factors studied in sections 1.1 to 1.4 give a partial approach to the
productivity.
It doesn't consider, for example, possible scale economies among the
factors.
5
The Total Productivity of Factors measures the contribution of all the factors
referred in the precedent parts. In this way, it is considered P (W, C, Z) equal to
the sum of PW with PC and with PZ. Besides, it is also considered that VA (W, C, Z)
it is the same to the sum of the values increased by each one of the factors.
That is:
P(W,C,Z) = PW + PC + PZ
(14)
Being:
 (W , C, Z ) = W+C+Z
(15)
And
VA(W,C,Z) = VAW+ VAC + VAZ
(16)
Then:
VA(W,C,Z) = P(W,C,Z)*  (W , C, Z )
(17)
VA(W ,C , Z )
That is to say:
P(W,C,Z) =
With:
 (W , C, Z )  0 e P(W,C,Z)  0
 (W , C , Z )
(18)
As different types of productivities associated to several production factors
exist, the value added obtained in the end of a period begin of the several
productive factors that contribute to the production.
Each one of the productivities is calculated starting from the increased
respective values this is the reason why it also considers VAW exist, VAC and
VAZ.
1.6 AVERAGE PRODUCTIVITY AND MARGINAL PRODUCTIVITY
The average productivity (PME) keeps in mind the value added and the
administrative general expenses (AGE) in units. This way to calculate the
medium productivity is used: the number of workers (being in this case the
average pondered by the number of workers), or the number of establishments
(being in this case the average pondered by the number of establishments).
Like this:
VAT
PME =
: number of workers or number of agencies
(22)
AGE
Marginal productivity (PMG) reflects gains in productivity terms when
administrative costs vary of an unit, that is, allows to know as it increases the
value added (VA) when there is an unitary change in administrative general
expenses (AGE):
 (VAT )
PMG =
(23)
 ( AGE)
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1.7 ADVANTAGES AND LIMITATION OF THE PRODUCTIVITY AS A
MEASURE OF EFFICIENCY
The productivity can be used as measure of the efficiency of a company.
Valuing through income statements each factor and the increased values, the
(18) expression can be applied and to calculate the productivity in the sense of
measuring the efficiency.
However, it can benefit from synergies among the productivities of the
several factors that have the effect of turning (PW + PC + PZ) < P (W; C; Z), in
fact can take to an increase of VA (W, C, Z) as it happens in the case of the
curves of experience.
To lessen this circumstance new formulas are considered that include a
residue, e.
Like this if:
P’(W,C,Z) = PW + PC + PZ + e
(25)
With:
VA (W, C, Z) = VAW+ VAC + VAZ
(16)
And,
 (W , C, Z ) = W+C+Z
PW + PC + PZ + e =
That is:
P’(W,C,Z) =
VA(W ,C , Z )
(15)
VA(W ,C , Z )
 (W , C , Z )
 (W , C , Z )
(26)
(27)
It is admitted however, not to be easy to quantify the several productivities
and the several values added. It won't also be easy to value PZ once it is part of
the non-formal dimension of the productivity
The possible interdependence among the several productivities is another
problem that is placed to the model represented by the expression (18).
According to Teixeira (1985) the elaboration and use of productivity ratios
suffer from several limitations such as the following ones:
 The productivity ratios just treat quantitative data;
 Decisions of short period cannot deeply affect the financial documents
and the ratios based input data taken from them;
 Comparison among ratios of productivity of companies operating in the
same industry can be biased by different practices according to
accounting flexibility and choice;
 Standardisation of the productivity ratios do not exist;
 The productivity ratios have to be analysed in its context, simple
expressions of the type “this ratio it is good or this ratio is bad” should be
avoided.
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2. LITERATURE REVIEW
With view to identify the variables that are considered important for the study
of the productivity, it was preceded to a previous revision of the literature that
together with the treatment of data, it implied a research developed at libraries
of national Universities and in bases of existent data in the Internet.
In the studies of the productivity one can identify two period: the first one is
prolonged to the beginning of the eighties; the other extends from this time to
nowadays. In that way this chapter is formed by two parts.
While in the first the theme is only approached partly of works, namely in
one or two chapters, starting from the decade of 80 developed perspectives
appears, being attended the publication of complete works on the theme of the
productivity.
It is the sensation that in the first referred time, the authors are limited to
analyses the theme in the sense of they study " the means for what it should be
the productivity " without they make complete approaches. Starting from the
eighties they begin to appear references to the administration of the
productivity, namely in authors as: Prokopenko (1987) and Sumanth (1985). To
the subjects: “what is the productivity? ", the given an objective answer, it is
supposed that the domain of the subject " what it should be the productivity ".
Works more recently published are above all approaches that remove part of
the tools provided by the evolution of the technology computer science: They
use data bases and statistical programs to deal with large volumes of
information. These studies more deepened on the theme of the productivity they
could serve as support to other areas of the knowledge.
2.1
CONTRIBUTES FOR THE THEME TO THE EIGHTIES OF THE
CENTURY XX
Productivity is not a new topic it as has been approached, since Old Greece
so much at macroeconomics level (study of economies) as to microeconomics
level (study of companies). To macroeconomic level the concern was centred in
knowing in certain economy the behaviour it was economical and rational in
way to be considered efficient. To microeconomic level, the target was known if
certain company, or group of companies, is to obtain its production with base in
rational behaviours that take to an increase of the efficiency. It is this level that
the investigation is developed.
Close to nowadays, Sumanth (1998) refers that the word productivity has
existed for more than two hundred years, having been mentioned for the first
time by Quesnay, in an article dating back to 1766. In 1883, another French
author, Littre, defined productivity as the " ability to produce ".
From forties to the eighties of the last century several studies about
productivity were published. You gave they stand out accomplished them
abroad, by Bredt (1943), Pauwels (1947), Gutenberg (1961), Pirla (1964) and
Schneider (1968). At a national level they are pointed out the studies
accomplished by Vidal (1961) and for Sarmento (1969).
Bredt (1943), mentioned by Gutenberg (1961), considers the productivity as
the totality of goods or services that it manufactures a productive unit in an unit
of time, corresponding to the period of its use in agreement with a certain effort
and with a given work speed. Of the definitions exposed by Bredt (1943) on the
8
production concepts, productivity, production capacity and occupation, are
deduced that is important for the doctrine of the fixed costs to know which
should be chosen as independent variable of these magnitudes.
For Pauwels (1947), the productivity is measured in absolute terms and is
based in the principle of the minimum effort, that is to say, for the obtaining of a
certain result a superior effort should not be accomplished to the necessary
minimum, everything that is above this minimum it is considered as waste.
Pauwels (1947), identifies two productivity types - technical productivity and
economic productivity - in the existent relationship between the accomplished
effort and the obtained result. The technical productivity seeks the obtaining of
the maximum amount of production with a minimum of resources, being an
internal manifestation of the company. This Belgian author, when analysing the
productivity in the ambit of the exploration, considers productivity as the
exploration result taken in its group, being condition sine qua non of the
productivity the existence of surplus value, designated by exploration benefit.
In 1950, the Organization for the Economic Cooperation European (OEEC),
it presents a formal definition of the productivity:
“Productivity is the quotient obtained by dividing output by one of the factors
of production. In this way it is possible to speak of the productivity of capital,
investment, or raw materials, according to whether output is being considered in
relation to capital, investment or raw materials, etc.”.
German Gutenberg (1961) bases its analysis to the theme of the productivity
on neoclassical studies about the marginal productivity of the factors. Following
the reasoning of Walras (law of the equalization of the marginal productivities of
the production factors to the respective price to treat the factors searches in
function of the price), the author considers the measurable productivity and it
enhances the relationship between the revenue increase and the change of
amounts of production factors (trade-off of the factors). However, to defend that
the company increases the employment of a factor to the point in that the
marginal productivity of the factor becomes the same to the price, it is
necessary to suppose a variation of the employment of the factor placed in a
zone in that its marginal productivities are growing, otherwise the manager
stops adding factors to the production.
Pirla (1964) is the first author to give ratio sense to the productivity. He
defines the productivity as the relationship among obtained production and
resources used to get that production, that is, the productivity is the relationship
between the amount or the value of the production and the amount or value of
the used factors. This Spanish author analyzes the productivity of a factor
considering the technical units used of the same, emphasizing the productivity
of the work because according to him, this factor frequently serves as measure
to the remaining factors. The productivity of the work can be expressed in two
ways:
 Number of necessary hours/man to obtain a given production;
 Production volume that is obtained of a given amount of
hours/man.
Relatively to the factors used in the productivity increase, Pirla (1964),
considers this subject as one of the great concerns of politicians, sociologists
and economists of its time, elaborating a list of the factors that more influence
has in the increase of the productivity.
He considers like this, namely:
9


The dimension of the companies;
The width of the market on which operates the company, being this
factor linked to the previous;
 The capital volume uses for worker;
 The appropriate organization of the company;
 The personnel's good disposition, that is the workers' effective
cooperation;
 Larger or smaller administrative difficulties in the exercise of the activity;
This author, referring measures that the company doesn't control as the
regime laboral and the taxes approaches the existence of capitalization
problems it interns in the companies.
Considering that the productivity increase depends on the degree of
capitalization of the companies (of the tools and machineries used, of the used
methods, of the drawing of the product, of the matters cousins' quality and
naturally of the efficiency of the human work) consequently the problem of the
increase of the productivity requests the consideration of all these factors, that
is, as larger the degree of larger capitalization the possibility of the company to
have productivity increases.
A productivity increase means to obtain a certain amount of products with
the same consumption of resources or productive factors, or then to obtain the
same amount of production with smaller costs, being able to not the increase of
the productivity to pass also for the improvement of the quality of the obtained
product.
Schneider (1968) is, to its time, the only author to accomplish a revision of
the literature, although only of such German authors like Prion (1925),
Schmalenbach (1930), Fischer, Hess and Seebauer (1939), Schlatter (1939),
Weigmann (1941) and Bredt (1943).
As contribute of Schneider (1968) is pointed out the distinction done among
the study of fixed costs - global and specific productivity - and the study of
variable costs - marginal productivity.
The German author has a productivity understanding in the occupation
sense (or occupation degree) of the productive factors, considering the several
authors' studies that approach this subject, namely: Schmalenbach (1930), that
understands for occupation degree the amount of products manufactured in a
period of time and, Prion (1925), that considers the occupation degree as being
the amount of manufactured product and sold.
Schneider (1968) also considers the idea of Schlatter (1939), for who the
activity concepts and occupation correspond at the time it uses of an unit of
work or section. Referring Fischer, Hess and Seebauer (1939), Schneider,
considers the occupation degree as a definition too much generic that goes
away of the productivity concept.
Schneider (1968) use the definitions of Bredt (1943), considering the
importance of the distinction among production, occupation and productivity. In
this way affirms that the production is the totality of goods that produces a
certain unit during a period of time. Occupation is the state of activity of a
company, due to the execution of tasks and requested services, taking as
measure the necessary time to complete the said execution. Productivity, is the
totality of goods or services that it manufactures a productive unit in an unit of
time, corresponding to the period of its use in agreement with a certain effort
and with a given work speed.
10
In Portugal, they deserve prominence Vidal's (1961) and Sarmento (1969)
studies.
Vidal (1961) affirms that to arrive to a definition of the efficiency concept he
cannot face the company of a point of view to parcel out, and that the efficiency
implies the complete accomplishment of a certain aim, from where it results that
the company can be considered efficient when it has reached the aim or aims,
that had been it entirely marked. Vidal (1961) trying to translate the relationship
among production obtained in certain period of time, and one of the productive
factors, or the group of productive factors uses, in the same period of time, to
obtain that production it arrives to the productivity definition, that divides in two:
the global productivity and the specific productivity (for factor).
Sarmento (1969) considers the efficiency as force or productive virtue of an
useful effect and as attainment of a preset aim. An efficient company is that
assisting to the conjuncture, it works rational and satisfactorily under all the
aspects. Existing several efficiency symptoms, of the which Sarmento (1969)
points out: products of good quality, reduced costs, competitive prices, positive
net profits, easy credit obtaining, adaptability to the tastes and the public's
conveniences, respect for the law and the existence of good human
relationships.
For Sarmento (1969) the efficiency, unlike Vidal (1961), doesn't have to
always be seen in global terms (total efficiency), also appearing relative
judgments the certain sector, or in the case of the company, to a private aspect
(partial efficiency). To evaluate a company (level microeconomic) or an
economy (level macroeconomic) it is efficient, Sarmento considers the
existence of three types of measures:
 Productivity ·;
 Profitability;
 Economicity.
The productivity according to Sarmento (1969) means fecundity, fertility,
aptitude to produce or quality than it is productive. Could be analyzed of two
point of view, the point of economic view and the technical point of view, the "
problem of the productivity" is in the rational use or combination of the
resources or productive forces, half consisting of the accomplishment of the
beginning of the minimum.
Sarmento (1969) also approaches the subject of the " marginal " physical
productivity (Neoclassical School) that considers defined as the increment that
suffers the production by virtue of the employment of a new unit or part of
variable factors. Once the company is a conjunction of goods and of people, it
happens it to measure the dimensions assisting simultaneously to the total
capital that she uses (real index) and to the number of agents that collaborate in
her (personal index).
2.2 CONTRIBUTES FOR THE THEME AFTER THE EIGHTIES OF THE
CENTURY XX
During the decade of 70 of last century, are little the references to specific
publications on the theme of the productivity. However, we meet works
published for: Fame (1970), Depallens (1977), Fulmer (1978) and Cockroach
(1981) on other related themes. The theme of the productivity concretely is
11
forgotten, perhaps for her to try to explain the efficiency with base in another
measures that not the productivity.
In the decade of eighty the importance of the theme returns to the top. They
appear several studies then, attributed namely, Sumanth (1985), Prokopenko
(1987) and at national level they stand out the works accomplished by Ferreira
(1985). The three works appeared under the book form, gone back to the
administration of the productivity. A change is observed in the optical of
presentation and development of the theme, jumping of the pure analysis for the
administration.
Sumanth (1985) distinguishes productivity of the production concepts and
efficiency: It considers that the productivity requests efficiency and
effectiveness.
In macroeconomic terms Sumanth (1985) it considers that the rate of growth
of the productivity has influence in the life level, in the inflation, in the
unemployment rate and, in general, in the economic welfare. The quality and
the productivity used together develop the countries.
In microeconomic terms Sumanth (1985) refers that a company with better
productivity than the average of the sector is provided to have larger mark-up.
Plus, if the productivity of a certain company grows with larger velocity than the
one of the competitors, the margins tend to grow still more.
Prokopenko (1987) understands the productivity concept as the relationship
among the output generated by a production or system of services and the
necessary input to the creation of the output. For Prokopenko (1987) the
analysis of the productivity is important to get productivity increases, as if of a
separate element if it negotiated. This author tries to divide the productivity the
most possible in way to get some (all) the domain on the measure that
according to him also potency the competitiveness. In its work, this author
studies the factors of improvement of the productivity with base in an integrated
model developed by Mukherjee and D. Singh in 1975, where the productivity
factors appears systematized in two groups: internal factors and external factors
according to the figure 1.
12
Figure 1 – Integrated model of Productivity Factors
Factors of Productivity
Internal factors
Hard
factors
- Product
- Companies
and equipment
Soft factors
External factors
Structural
adjustments
- Human
resources
- Economic
- Organization
- Social and
Demographic
- Tecnology
-Work methods
- Energy
- Administration
styles
Natural
resources
- Labour
- Land
Govern and
infrastructures
- Institutional
mechanisms
- Politics and
strategy
- Energy
- Raw
materials
- Infrastructures
- Public
companies
Source: Prokopenko J. 1998 (adapted of Mukherjee and D. Singh in 1975, p.
10)
In Portugal, Ferreira (1985) considers that in the study of companies two
traditional efficiency measures exist: the productivity and the profitability. This
author still keeps in mind the use of another measure, the economicity. He
points out that the three types of measures can be used in different managerial
aspects, namely:
 Technical Aspects of the production, where optimal combinations are
sought, with economies of productive means - productivity measures;
 Economic aspects of the company, where optimal productions are
sought, capable to assure the best results -profitability measures;
 Technical and economic aspects of the company, where rationalized
actions are sought and planned, in the sense of reaching preset levels economicity measures.
More in detail, Ferreira (1985) considers that the productivity measures put
in evidence alterations in the production with base at the beginning of the
minimum half and in function of the production factors (capital, labour, etc.).
Accomplishing the distinction among:
 Global Productivity, meets accomplishing the quotient of the total of the
production for the total of the used production factors;
 Specific Productivity, meets accomplishing the quotient of the total of the
production for the total of a used specific production factor.
13
The profitability measures show a degree particularly, a part of the result in
relation to certain element taken as appreciation base (for example, a capital or
a volume of business).
The economicity measures, are good to know of the economic advantages
gotten with the rational use and combination of the productive factors, allowing
to evidence for example if the work, the production, the sale, among other
activities, they took place in the best economic conditions.
During the two following decades a certain emptiness of scientific production
was verified in this theme, appearing in the last five years, works at national
level, Lopes (1998) and Canhoto (1999), internationally, Jackson, P. Fethi, M.
Inal, G. (1998) and Han, G. Kalirajan, K. and Singh, N. (2003) that present new
approaches to the theme in study.
Lopes (1998), with base in the works of Sumanth (1985) and Prokopenko
(1987), accomplishes a study where characterizes subjects linked to the
productivity at managerial level, in particular companies of bank services.
Considering the company as the place where meet different means to obtain a
certain result develops numeric relationships between outputs and inputs in
order to obtain a vision of the production system (the company). The subject of
the productivity, by Lopes (1998), are not drained in the simple inputs
determination and outputs, this determination should be starting point for
deeper analyses, namely, the study in structured ways of analysis and
improvement of the productivity, being the efficiency of operation of the
company’s the problem, it exists the need of processes of continuous
improvement of the productivity permanently and consequently of the efficiency.
Canhoto (1999) develops an empiric investigation about the efficiency and
competitiveness of the Portuguese bank sector. In particular, she studies the
behavior of the Portuguese bank sector discussing and evaluating the subjects
of efficiency of the institutions and competitiveness of the markets.
The investigation about the behavior of the bank sector between 1990 and
1995 allows to detect a positive evolution in what it respects to the efficiency of
the institutions along the considered period. The author refers the
transformations operated in Portugal, namely starting from the second half of
the seventies as justification for the accomplished study.
Relatively to the term productivity, Canhoto (1999) uses it as efficiency
measure to do a separation of its study (the banks) for clusters (old, new,
national or foreigners).
On the other hand, the distinction is marked among two " generations " of
institutions it agrees in to private historical evolution happened in the
Portuguese bank sector, contributing this situation, for the appearance of
significant differences in efficiency terms, with the new " banks " in a more
favorable position relatively to the old " banks ".
The evaluation of the competitiveness of the bank sector, according to the
author, suggests the operation of the markets in distant conditions of the
paradigm of the perfect competition, evidencing oligopoly situations. The
evidence points for the competitiveness during the investigated period,
particularly in the market of deposits where the author considers the more
robust obtained results.
They come in the Table 2 the works referred as contributes for the study of
the productivity accomplished in the last years by Portuguese authors.
14
Table 2 – Studies about the productivity accomplished by national authors
Author
and
it
Dates
Lopes, J.
(1998).
Canhoto,
A.
(1999).
Object
Study
of
The
Analysis
and
the
improvem
ent of the
productivit
y in the
services:
The case
of
the
bank
sector.
Efficiency
and
competitiv
eness in
the
Portugues
e banking.
Sample
Methodology
Commerci
al banks
and
of
saving.
Empiric
analysis that
involved the
accomplishm
ent of an
inquiry
that
had for base
a group of
published
empiric
studies of the
mentioned
literature. The
picked
up
information
was
compared
with
the
results of the
previous
studies.
20 banks,
17 of they
domestic.
Non
parametric
Abordagem construction
of
medium
indexes
of
efficiency
(indexes
of
Malmquist).
Explanatory
variables
- Employees Counters
Actives
Credit.
Inputs: - work
physical
capital
Outputs:
loans
deposits
warranties dependencie
s.
Results (Level of Significance)
The author ends that the banks that
constitute the sample if di videm in
3 groups, the banks with 13/14
employees for counter, the banks
with 16 employees for counter and
the banks with 19 employees for
counter. Of the 6 banks only in an it
exists in the structure of the
company a service to who are
attacked responsibilities formally in
relation to the subjects of the
productivity.
The differences between the
efficiency of OTE and PT are
statisticaly significant in 1990,1991
and 1992 for a level of 1% for every
tests , with exception of two tests
and, in 1993 for a level of 5% for
most of the tests, in 1994 and 1995
the null hypothesis is rejected
clearly not. The more favorable
medium indexes of efficiency are
they observed in the group of the
new banks. In the case of global
technical efficiency, for example,
the averages of the new and old
groups are respectively of 77% and
of 62%.
Period
Analysis
of
Observations
September
15, 1997 to
October 15,
1997.
The
author
leaves
of
I/you
had
gone all to
investment
banking.
Focaliza the
study in the
Portuguese
case.
The
number
of
answers
received
auspiciously
is of 35,3% it
is very low,
Just
6
answers, of
17 banks.
1990 to 1995.
The index of
a productive
unit
never
decreases
with
the
reduction in
the
dimension of
the
sample
used to build
a reference
border.
The Portuguese authors that treat the theme of the productivity analyze the
bank sector; perhaps for this sector to present a high efficiency level relatively
to the remaining sectors as refers Mendes (1994).
Of the works developed abroad in the last years, they stand out
accomplished them for Jackson, Fethi and Inal (1998) on one side and, Han,
Kalirajan, and Singh (2003) for another.
Jackson, Fethi and Inal (1998) estimated individual efficiencies for banks
and productivity changes during the period 1992-1996, using non parametric
methodologies, such as Data Envelopment Analysis (DEA) and DEA based on
the Index of Malmquist to analyse the productivity of the Turkish commercial
banks, the authors decompose productivity change in two components, the
catching up effect and the frontier-shift effect. They do not specifically define the
productivity leaving of the presupposition that the subject has already been
worked by other authors such as Malmquist (1953) and Dig, Christensen and
Diewert (1982), mentioning its works in the application of the these authors'
methodology.
Han, Kalirajan and Singh (2003) in a work in that compare the productivity,
the efficiency and the economic growth of the countries of the End it Guides
with the rest of the world, they decompose the growth of the total productivity of
the factors in technical efficiency and technical progress, applying the variation
coefficient in the approach to the production border. In a globalization context,
the work factors and capital, for smaller than they are its effects they influence
15
the productivity. These authors present a comparative study at international
level the one that show the existence of a new current of the study of the theme.
Table 3 contains a summary of the mains issues in the works described
above, which contributed to the study of the productivity, accomplished in the
last years by foreign authors.
Table 3 – Studies about the productivity accomplished by foreign authors
Author and
it Dates
Jackson,
P. Fethi,
M. Inal,
G.
(1998)
Han, G.
Kalirajan,
K. e
Singh, N.
(2003)
Object of
Study
The study
seeks to
study the
efficiency
and the
increase of
produtividade of the
sector
bank
commercial
Turk.
The study
compares
the growth
sources
this Asian
one with
the rest of
the world.
Sample
56
commercial
banks.
45
designated
developed
countries
Methodology
Non
parametric
methodologies
were used:
Date
Envelopment
Analysis
(DEA) and
DEA based on
the indexes of
Malmquist.
The coefficient
of variation of
the
abordagem of
the production
border is
applied, that
isolates the
effect of
catching up
(increase of
technical
efficiency) of
the effect of
shifts in the
frontier
(technical
progress)
Explanatory
variables
Results (Level of
Significance)
- Number
of
employees.
- It not
adds of the
operational
expenses
linked to
the work. loans. demand
deposits. team
deposits.
The
productivity of
the Turkish
commercial
banking grew
excepção
done to the
period 19931994. You
differentiate
yourselves of
observed
productivity
they are
explained by
different
organization
forms.
(private,
foreigners).
GDP (in
dollars) capital
Stock (in
dollars) Population
(in number
of people).
The results
based on the
statistical test
of Wald,
indicate that
the
hypothesis of
constant
revenues to
the scale
cannot be
rejected, that
is to say, the
this-Asian
economies
behave in the
same way
that the
western
economies.
Period of
Analysis
Observations
1992
to
1996
The work was
accomplished in a
period in a
powderliberalization
phase, the
productivity
increase is also
due to
technological
progresses and
not only due to
the liberalization
in itself of the
sector.
1970
to
1990
The results,
suggest although
between 1970
and 1990, they
are four countries
(Japan,
Singapura, Korea
of the South and
Taiwan) that
accompany the
countries more
developed in
terms of growth of
the performance
of TFP (total
factor
productivity). In
work terms, these
economies have
great populations
relatively to the
western
economies. The
oriental culture
turns the most
difficult layoff than
in another areas
and benefits don't
exist for
unemployment as
they exist in the
case of the
western
countries.
In way of conclusion of this section of the work, it executes to observe that
the revision of the literature about the productivity, seems to indicate that:
16

The productivity is seen as a middle to reach the efficiency in the
company or in an economy;
 Doesn’t have an exclusive approach on the theme, appearing a lot of
times related with other themes as the efficiency and the profitability;
 The analyzed studies go back above all to the part organizational of the
company, or for the economy in sense bark, not relating the two slopes;
 Variations of the levels of means and measures that aid the productivity
increase;
 The unproductiveness is present made a mistaking this subject with
wastes in the costs, what is different things;
 The approach of the theme developed in parallel with the economic
science;
 The studies develop of the it should be for what it is the productivity;
 The most recent studies go back to the production borders, trying to
measure the productivity with resource to non- parametric-tests;
Of the mentioned studies one doesn't find reference to the connection
between market price and productivity, however, all the authors agree that a
productivity increase allows increase of value of the company.
With base in the literature comes to follow the Figure 2 that tries to give the
picture of the concepts: efficiency and productivity.
Figure 2 – The Way to Excelence
Factors of Production
- Labour
- Capital
- Others
-
Results
Increased value
Profit
Net profit
Amount
Number of work
places
(...)
Measures of Efficiency
- Produtivity
- Profitability
- Economicity
- Quality
- Estability
- Sociability
Eficiency
Excelence
17
3. EMPIRICAL STUDY
This point divides in fourth parts, in the first comes the methodology, in the
second part comes and the results are analyzed, in the third takes place the
association study between productivity and quotation and finally are referred the
limitations of the study.
3.1 METHODOLOGY
In this work, the banks with shares admitted to the quotation in the Market of
Official Quotations (MCO) of BVLP constitute the population.
For the selection of the sample we considered the half-yearly information
composed by 10 moments of observation for each bank quoted during the
whole period of January 1, 1996 to December 31, 2000. In this period, fifteen
banks had shares admitted to the quotation.
They were excluded of the sample the banks that were not quoted along the
whole period and that don't have in the quotation period a frequency index
(FR2) superior at 90%. Relatively for FR2, we have considered this index as the
proportion of the number of sessions in that the value formed at least an official
quotation in the total number of sessions the one that the value was admitted in
the period in analysis.
In the cases of existence of titles subject to an stock splits we have
considered the price value as if it had not happened unfolding. The values of
the price after the stock split are multiplied by five and maintained in the
sample. In this situation we meet the titles of BCP and of BPI, subjects to a
stock split to November 15, 1999 and, to October 6, 1999 respectively.
The chosen of temporary horizon was of January 1, 1996 to December 31,
2000 with base in the readiness of information, being privileged more recent
years to give an actuality stamp to the study.
In the Table 4 the designations of the banks whose shares (although only
partly of the period) as well as the respective acronyms.
Table 4 – Portuguese banks with listed shares in the Period from 1996 to 2000
Designation of the Bank
Banco Pinto & Sotto Mayor
Banco Essi
Banco Mello
Banco Português do Atlântico
Banco Fomento Exterior
Banco Santander Central Hispano
Credit Lyonnais Portugal
Crédito Predial Português
Central Banco de Investimento
Finibanco
Banco Internacional do Funchal
Banco Espírito Santo e Comercial de Lisboa
Banco Totta e Açores
Banco Português de Investimento
Banco Comercial Português
Acronym
BPSM
BE
BM
BPA
BFE
BSCH
CLP
CPP
CBI
FIN
BANIF
BESCL
BTA
BPI
BCP
1996





1997




1998



























1999














2000








18
The Table 5 shows the FR2 of the banks whose shares were listed during the
period of January 1, 1996 to December 31, 2000.
Table 5 – Frequency Indexes (percentile values)
Designation of the Bank
Banco Pinto & Sotto Mayor
Banco Essi
Banco Mello
Banco Português do Atlântico
Banco Fomento Exterior
Banco
Santander
Central
Hispano
Credit Lyonnais Portugal
Crédito Predial Português
Central Banco de Investimento
Finibanco
Banco Internacional do Funchal
Banco
Espírito
Santo
e
Comercial de Lisboa
Banco Totta e Açores
Banco
Português
de
Investimento
Banco Comercial Português
Acronym
BPSM
BE
BM
BPA
BFE
1996
100
92.31
100
96.36
-
1997
100
100
100
99,17
-
1998
100
98.80
100
100
-
1999
97.59
99.60
99.20
-
2000
-
BSCH
-
-
-
100
100
CLP
CPP
CBI
FIN
BANIF
89.88
99.6
96.88
97.17
97,50
99,17
97,50
100
85.14
99.60
70.68
100
99.18
88.13
97.99
73.49
100
99.60
77.15
98.88
99.25
BESCL
100
100
100
99.20
100
BTA
100
100
99.20
98.39
96.63
BPI
100
100
100
99.20
100
BCP
100
100
100
99.20
100
According to the criterion described, 10 banks were excluded and the final
sample consists of the 5 banks listed in the Table 6.
Table 6– Banks in the final sample
Designation of the Bank
Banco Internacional do Funchal
Banco Espírito Santo
Banco Totta e Açores
Banco Português de Investimento
Banco Comercial Português
Acronym
BANIF
BES
BTA
BPI
BCP
The final sample consists of fifty observations verified for five years (ten
semesters), for five banks.
As data bases necessary to accomplish this investigation did not exist, a
specific data base was constructed, using data from the income statements and
of the share prices of the banks at the end of semester.
Sources of the data necessary to perform this research were DATHIS, the
published by BVLP, and the Official Bulletin of Quotations, where the annual
finance reports and annual accounts of the companies with shares listed in
BVLP were published. The shares were transcribed of the Official Bulletin of
Quotations.
Using SPSS version (11.5) were the values of the variables were introduced
manually from initials of the income statements and the prices.
The information to negotiate is summarized to two variables: COT and PTF.
For its treatment two columns were created in SPSS, being constituted like this
specifically the part of the folder of data treated.
Table 7 listed the variables collected for treatment.
19
Table 7- Variables
Designation
Value added
Interests and compared profits
Revenue of titles
Commissions
Interests and compared costs
Administrative general expenses
Other taxes
Total operational costs
Price
Total productivity of the factors
Acronym
VA
JPE
RT
COM
JCE
GGA
OI
TCO
COT
PTF
With the relative data to the shares and the values of the productivity in the
base of data especially built for the effect gets ready it analyzes it to the
association relationship between the productivity and the prices of the
Portuguese banks with base in the model of simple linear regression. It is
increased that the validation of the results was done by the tests: p-value and
Durbin-Watson.
A positive ß is waited with R2 small because breaks of the begin that the
productivity is not considered for the increased of share value admitted.
3.2 PRESENTATIONS AND ANALYSIS OF THE RESULTS
After having exposed the methodology, they come and they are analyzed to
follow the results of the study.
Variable PTF is obtained with resource to the relationship output/input. Of
the output makes part VA, the inputs they are considered GGA.
Now are presented the tables where consist the values of PTF for bank in
each period. Tables 8 to 12 contain the values of the independent variable for
the banks include in the sample.
Table 8 – Calculation of PTF of BANIF
(values in thousands of euros)
Year/
Semester
1996/1
1996/2
1997/1
1997/2
1998/1
1998/2
1999/1
1999/2
2000/1
2000/2
VA
GGA
PTF
5874599
14350933
10099898
21966473
12333825
24406055
11662755
23270900
12970654
27327912
4224927
9637665
6917566
13931433
7754147
15327482
7910524
16506020
9835678
20424284
1,39
1,49
1,46
1,58
1,59
1,59
1,47
1,41
1,32
1,34
20
Table 9 – Calculation of PTF of BCP
(values in thousands of euros)
Year/ Semester
1996/1
1996/2
1997/1
1997/2
1998/1
1998/2
1999/1
1999/2
2000/1
2000/2
VA
73005608
1,43E+08
96079183
1,75E+08
1,11E+08
2,03E+08
1,09E+08
2,20E+08
1,88E+08
3,73E+08
GGA
62359311
1,29E+08
71015531
1,29E+08
75242000
1,38E+08
72141884
1,50E+08
1,24E+08
2,44E+08
PTF
1,17
1,10
1,35
1,35
1,47
1,47
1,50
1,47
1,52
1,53
GGA
31112000
66825000
35539000
76727000
39154000
84558000
42594000
4,55E+08
2,25E+08
5,18E+08
PTF
1,48
1,44
1,56
1,55
1,64
1,60
1,93
1,76
1,87
1,81
GGA
14494841
41920135
35325874
72604000
35688000
73495000
1,84E+08
3,84E+08
2,05E+08
4,31E+08
PTF
1,43
1,35
1,40
1,40
1,47
1,38
1,34
1,30
1,50
1,47
GGA
32891273
65432172
32799714
63169999
30412748
66212756
32784677
66036011
31869000
75340744
PTF
1,44
1,52
1,74
1,79
1,85
1,73
1,70
1,61
1,79
1,63
Table 10 – Calculation of PTF of BES
(values in thousands of euros)
Year/ Semester
1996/1
1996/2
1997/1
1997/2
1998/1
1998/2
1999/1
1999/2
2000/1
2000/2
VA
46071000
96175000
55539000
1,19E+08
64241000
1,35E+08
82032000
7,99E+08
4,21E+08
9,36E+08
Table 11– Calculation of PTF of BPI.
(values in thousands of euros)
Year/ Semester
1996/1
1996/2
1997/1
1997/2
1998/1
1998/2
1999/1
1999/2
2000/1
2000/2
VA
20693001
56614429
49593345
1,02E+08
52335000
1,02E+08
2,46E+08
4,99E+08
3,09E+08
6,34E+08
Table 12– Calculation of PTF of BTA.
(values in thousands of euros)
Year/ Semester
1996/1
1996/2
1997/1
1997/2
1998/1
1998/2
1999/1
1999/2
2000/1
2000/2
VA
47423570
99587294
56909376
1,13E+08
56402338
1,14E+08
55727063
1,06E+08
57177000
1,23E+08
21
Starting from it picks up it of the prices comes the Table 13 where they
consist the quotations for period for banks included in the final sample.
Table 13 – Values of the dependent variable prices
(units: euros)
PERÍOD/BANCO
1 st Semester 1996
2 nd Semester 1996
1 st Semester 1997
2 nd Semester 1997
1 st Semester 1998
2 nd Semester 1998
1 st Semester 1999
2 nd Semester 1999
1 st Semester 2000
2 nd Semester 2000
BANIF
7,28
7,47
6,23
6,46
7,13
11,28
9,03
7,28
7,64
7,36
BCP
10,13
9,18
10,17
16,55
18,80
26,23
26,35
25,42
28,00
27,15
BES
11,22
12,47
13,52
19,95
27,18
27,49
26,46
22,85
28,00
25,97
BPI
8,92
9,92
9,60
17,08
22,43
29,90
28,90
21,00
21,45
18,50
BTA
12,40
15,29
14,71
14,57
17,96
28,09
20,65
15,50
23,99
27,95
To create sensibilities to the treated data, they come in the Tables 14 and 15
the average, mode, medium, deviates pattern, maximum and minimum.
Table 14 – Descriptive statistics to the Total Productivity of Factors
BANK
BANIF
BCP
BES
BPI
BTA
Mean
1,46
1,39
1,66
1,40
1,68
Mode
1,59
1,47
#N/D
1,40
1,79
Total productivity of Factors
Median
Std. deviation
Max.
1,47
0,10
1,59
1,47
0,15
1,53
1,62
0,17
1,93
1,40
0,06
1,50
1,72
0,13
1,85
Table 15 – Descriptive statistics to the Prices
BANK
BANIF
BCP
BES
BPI
BTA
Mean
7,72
19,80
21,51
18,77
19,11
Mode
7,28
#N/D
#N/D
#N/D
#N/D
Median
7,32
22,11
24,41
19,75
16,73
Min.
1,32
1,10
1,44
1,30
1,44
(units: euros)
Prices
Std. deviation
1,46
7,80
6,75
7,56
5,76
Max.
11,28
28,00
28,00
29,90
28,09
Min.
6,23
9,18
11,22
8,92
12,40
In the Table 16 come the descriptive statistics to the two variables
(productivity and listed) where it is verified that the average of variable COT is
of 18,832 euros (miss pattern of 7,03382) and the average of variable PTF is of
1,5508 (miss pattern of 0,17931) for 150 observations.
Table 16 – Descriptive statistics of the variables in the model
Descriptive Statistics
cotação
produtividade total
dos factores
Mean
18,8320
Std. Deviation
7,03332
1,5508
,17931
N
150
150
22
3.3 STUDY OF ASSOCIATION BETWEEN PRODUCTIVITY AND PRICES
Made in the base of data the relative columns to variable PTF and COT take
place the regression and the correlation analysis. With the correlation analysis
intends to know the straight and the direction of the association among the
variables. With the regression intends to be considered the value of variable
PTF corresponding to a dice value of variable COT.
The regression is obtained finding the value of PTF starting from the curve
of the square minima that better it is adjusted to the group of data. The resulting
curve has the name of curve of regression of variable PTF in relation to variable
COT, once PTF is estimated starting from COT.
Concerning the correlation analysis we should refer that the correlation
concept is one of the most important in the study of bivariated relationships.
Correlation measures indicate the force and direction of the association
between a pair of variables.
Table 17 – Correlations
Pearson Correlation
COT
1,000
,368
,
,000
150
150
COT
PTF
COT
PTF
COT
PTF
Sig. (1-tailed)
N
PTF
,368
1,000
,000
,
150
150
Table 17 shows that the coefficient of Pearson presents a value of 0,368
what it picks a weak linear association on increases of an associated variable
the increases in another. To affirm that variable PTF is correlated with the
variable prices, it is missed because with a coefficient of correlation of such low
Pearson one cannot at least say that there is correlation.
Correlation is the association degree among variables that has as aim to
evaluate as a linear equation or another describes or it explains the relationship
among variables. The estimate of by force of the correlation it is given by the
calculation of the correlation coefficients that come in the Table 18. These
coefficients present evaluations of the proximity of the association between two
variables
With base in these coefficients the equation of the recta is:
COT = - 3,551 + 14,443 PTF
(4,68)
(2,998)
(3.1)
Table 18 – It controls of the Coefficients
Coefficientsa
Model
1
(Constant)
produtividade total
dos factores
Unstandardized
Coefficients
B
Std. Error
-3,551
4,680
14,433
2,998
Standardized
Coefficients
Beta
,368
t
-,759
Sig.
,449
Zero-order
Correlations
Partial
4,814
,000
,368
,368
Part
,368
Collinearity Statistics
Tolerance
VIF
1,000
1,000
a. Dependent Variable: cotação
23
Table 19 shows ANOVA.
Table 19 – ANOVA
ANOVAb
Model
1
Regres sion
Residual
Total
Sum of
Squares
997,922
6372,757
7370,679
df
1
148
149
Mean Square
997,922
43,059
F
23,176
Sig.
,000a
a. Predic tors: (Constant), produtividade total dos fac tores
b. Dependent Variable: cotação
ß can be obtained multiplying the for the quotient of the esteemed deviations
of the dependent variable on the independent, that is,

s
0,17931
β = R =  * PTF = 14,443*
= 0,368
7,03332
sCOT
Sparing the association coefficient R leads to the coefficient of determination
R2 = (0,36821)2 = 0,135. This coefficient tends to be influenced by the sample
and for the existent dispersion in the data, being a optimistic measured of the
quality of the adjustment fact.
The R2 adjusted (Adjusted R Squared) is used, when the models have more
than one independent variable.
The expression is given for:
R2a = R2 -
k (1  R 2 )
= -0,0058
n  k 1
Where, k is the number of independent variables (1) and n is the sample
size (150). R2 can assume negative values or to become indefinite when R 2 or
the number of cases is small. SPSS presents in this situation the value 0 for R2.
It is verified that 0,6% of the medium variation in the prices are explained for
the productivity levels, being the remaining variation 99,4% explained by other
factors that are included in the variable aleatory ei.
Table 20 includes a summary of the results of the model.
Table 20 – Summary of the Model
Model Summ aryb
Change Statistics
Model
1
R
R Square
,368a
,135
Adjusted
R Square
,130
Std. Error of
the Es timate
6,56195
R Square
Change
,135
F Change
23,176
df1
1
df2
148
Sig. F Change
,000
Durbin-W
ats on
,191
a. Predic tors: (Constant), produtividade total dos factores
b. Dependent Variable: cotação
24
The low value of R2 means that the association between the two variables is
weak. If R2 is not good t tends to give the same result and it is not worthwhile to
do the test t, however Spearman test of association can be done in order to see
if the variables are associated.
3.4 Limitations
Critics to the methodologies adopted in this empiric study are presented;
they condition the final results of this study.
One of the main limitations of this study is the fact the BVLP presents weak
liquidity and faulty informative covering what forces the adoption of simplistic
approaches for studies of this nature.
Concerning the methodology adopted, of referring that in the model of
simple linear regression, the introduction of a unique explanatory variable is a
constrain, being a simplification of the reality.
Additionally we recognize that the criteria for selecting of the banks in the
sample were very rigorous and limitative for the sample of the market, however
this was the only form found to get a sample with some fiability.
The size of the sample is small. The cause of this fact roots in the own
dimension of the market and in its liquidity lack.
Studies that could help to support this investigation were about profitability.
Thus, the validity of the results of this research, conclusions should be faced
with reservation to the limitations presented.
4. Conclusions
Productivity and profitability are two possible measures to evaluate the
efficiency of a company. In recent past years the profitability has been having
primacy over the latter in the execution of this target.
The results show that the relationship between productivity and prices of the
Portuguese bank companies for the period from 1996 to 2000, is weak,
although the part explained by the model is well explained as it is verified by the
accomplished tests (P -value and Durbin Watson) related with PZ.
In the increase of the PW it cannot reflect-if not only the direct effect of the
factor W, but also each worker's fact to be better equipped in capital or other
factors.
It is considered although to measure just to PW is necessarily gives a
partially vision of the efficiency of the factor work (the same reasoning it can
apply to PC or PZ).
Being possible the calculation of the productivity of a system, since the
object in study can be modelled, that is, the productivity definition previously
found it can be applied to different situations and to do the calculation it is
necessary data that leave of the demonstrations of results in the case of this
work.
The incessant search of the efficiency constituted a characteristic line of the
administration of the companies in the sixties of last century. Is verified some
parallelism with nowadays. Today more and more companies are forced, due to
the competition, to reduce the prices.
Actually the companies should reduce to the maximum the variable costs for
they are competitive. In this perspective, it remains act on the cost of the form
25
factors to maintain them mark-up and, act on the factors implies to measure
them, of they’re the study of one of the measures of the efficiency - the
productivity.
The productivity concept developed along the time appearing tied a lot of
times have as efficiency and effectiveness that it hinders its study. The
productivity is an efficiency measure that unlike other measures (of efficiency)
as the profitability has not been considered by the analysts in the evaluation of
the companies through quotations.
The existence of several factors that influence the productivity implies the
possibility to be considered the existence of productivities associated each one
of those factors. As the calculation of the productivity is made with resource to
the added value, it is deduced that an increased component of value exists
relative to each factor of production.
The value-added total is supposed that is not coincident with the sum of the
increased of the identified factors values, what can be related with the synergies
existence among the factors. These synergies for its shift can take the
productivity increases.
The value added can be calculated in two optical: the optical of the
production and the optical of the distribution. In the bank sector the optical of
the production is considered the value added as the increment incorporated to
the products in the process of creation of value. In the optical of the distribution
it is kept in mind the remunerations rendered the several entities with who the
company links.
The productivity comes formalized in several ratios, being the including that
than it considers the relationship among output (value added) and input
(administrative general expenses), considering the optical of the production.
With base in this ratio reaches the conclusion that the productivity is not the
main factor to influence the price of the shares. This fact can be due to the
dimension of the Portuguese market that it is influenced largely by the
movement of international capitals, showing a follow behaviour this way
relatively to other squares of larger dimension, of there that the price doesn't
have explanation in factors with origin in the country.
On the other hand, the importance given by the analysts to the profitability
measures, and the apparent forgetfulness for the productivity measures, falling
back upon the presented results allows to conclude that little importance is
given to the productivity indicators.
The relationship between the variable productivity and prices of the
Portuguese companies, does tend in bill the regression study accomplished for
the period from 1996 to 2000, it is weak, although the part explained by the
model is well explained as it is verified by the accomplished tests (P -value and
Durbin-Watson). The possible reasons for this result are in the reduced
dimension and lack of liquidity of the market of capitals, in the existence of a
seemingly the companies that have high productivities seem to hide this fact of
the public in general (where it is also the competition), and the high
productivities end for not if reflect in the markets.
In this study the relevance is given to the productivity while measure to
quantify the efficiency. Relating the production with the factors uses, that are of
several natures although they can be interlinked.
26
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