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Production technologies and technical efficiency: evidence from Portuguese manufacturing industry

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Author Info
Ana Faria
Paul Fenn
Alistair Bruce

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Abstract

This paper aims to test whether a given type of process innovation, namely flexible production technologies (FPTs), contributes to increased firm efficiency. Using one-year firm data from the Portuguese manufacturing industry and applying a parametric stochastic frontier approach, individual technical efficiencies are obtained and their determinants simultaneously estimated, using a single-step procedure recently proposed by Battese and Coelli (1995). The results support the hypothesis that technological flexibility, measured through the use of FPTs, is important in explaining differences in efficiency. Furthermore, given the specifications of the stochastic frontier function, the null hypothesis that Portuguese firms are fully technically efficient is rejected.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 37 (2005)
Issue (Month): 9 (May)
Pages: 1037-1046
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Handle: RePEc:taf:applec:v:37:y:2005:i:9:p:1037-1046

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Trajtenberg, M. & Bresnahan, T.F., 1992. "General Purpose Technologies: "Engines of Growth"," Papers 16-92, Tel Aviv.
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  2. Roller, Lars-Hendrik & Tombak, Mihkel M, 1990. "Strategic Choice of Flexible Production Technologies and Welfare Implications," Journal of Industrial Economics, Blackwell Publishing, vol. 38(4), pages 417-31, June. [Downloadable!] (restricted)
  3. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-48, September. [Downloadable!] (restricted)
  4. Donald Siegel, 1997. "The Impact Of Computers On Manufacturing Productivity Growth: A Multiple-Indicators, Multiple-Causes Approach," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 68-78, February. [Downloadable!] (restricted)
  5. Berndt, Ernst R. & Morrison, Catherine J., 1992. "High-tech capital formation and economic performance in U.S. manufacturing industries : an exploratory analysis," Working papers 3419-92., Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
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  6. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
  7. Norman, George & Thisse, Jacques-Francois, 1999. "Technology Choice and Market Structure: Strategic Aspects of Flexible Manufacturing," Journal of Industrial Economics, Blackwell Publishing, vol. 47(3), pages 345-72, September. [Downloadable!] (restricted)
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  8. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July. [Downloadable!] (restricted)
  9. Carlsson, Bo, 1984. "The development and use of machine tools in historical perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 5(1), pages 91-114, March. [Downloadable!] (restricted)
  10. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-28, June. [Downloadable!] (restricted)
  11. Schmidt, Peter & Knox Lovell, C. A., 1979. "Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers," Journal of Econometrics, Elsevier, vol. 9(3), pages 343-366, February. [Downloadable!] (restricted)
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  1. Carlos Carreira & Paulino Teixeira, 2007. "Internal and External Restructuring over the Cycle: A Firm-Based Analysis of Gross Flows and Productivity Growth in Portugal," GEMF Working Papers 2007-01, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]
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