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Comparing Regional Technical Efficiency in UK Manufacturing Plants: The Case of Northern Ireland 1974-1995

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  • Richard Harris

Abstract

This paper uses estimates based on the stochastic frontier production function approach applied to more than 200 four-digit UK manufacturing industries, covering the period 1974-95. It is shown that manufacturing plants in Northern Ireland on average operated at lower levels of technical efficiency when compared to their counterparts in other regions of the UK (and especially plants located in South East England). This lower level of efficiency in the province is analysed both at the aggregate level and the industry level. At the industry level the province has fewer plants exhibiting the highest levels of efficiency within most industries, and too few plants open and close to 'cleanse' manufacturing of the worst plants (and those plants that do open and close often do not have efficiency levels such as to bring about improvements to the aggregate efficiency level). The major conclusion is that Northern Ireland needs to reduce the long tail of weaker plants that tend to drag down average efficiency. One way of achieving this is for plant turnover to increase whereby less efficient plants are replaced by more efficient plants. Cet article emploie des estimations basees sur une fonction de production frontaliere stochastique appliquee entre 1974 et 1995 a plus de 200 industries de fabrication a 4 chiffres situees au Royaume-Uni. On laisse voir qu'en moyenne les niveaux d'efficacite technique des etablissements industriels situes en Irlande du Nord s'averent moins eleves compares a leurs equivalents situes dans d'autres regions du Royaume-Uni (notamment les etablissements situes dans le sud-est d'Angleterre). On analyse ce niveau d'efficacite technique moins eleve a la fois globalement et sur le plan industriel. Il est evident que sur le plan industriel la province a moins d'etablissements qui demontrent des niveaux d'efficacite des plus eleves au sein de la plupart des industries, et rares sont les etablissements qui ouvrent ou ferment afin de 'nettoyer' l'industrie des plus mauvais etablissements (et les etablissements qui ouvrent ou ferment n'ont pas souvent les niveaux d'efficacite necessaires a l'amelioration du niveau d'efficacite global). En guise de conclusion, on affirme qu'en Irlande du Nord il faut reduire la longue queue d'etablissements plus faibles qui ont tendance a rabaisser l'efficacite moyenne. Une solution; un taux de renouvellement plus rapide des etablissements, d'ou le remplacement des etablissements moins efficaces par des etablissements plus efficaces. Dieser Aufsatz benutzt Schatzungen, die sich auf den Ansatz der Funktion stochastischer Grenzproduktion stutzt, welche auf mehr als 200 vierstellige Betriebe der herstellenden Industrie im Vereinigten Konigreich im Zeitraum 1974-1995 angewendet wird. Es wird gezeigt, dass herstellende Betriebe in Nordirland im Durchschnitt niedrigere Stufen technischer Leistung erreichten als vergleichbare Gegenstucke in anderen Regionen des UK (und besonders am Standort Sudostengland). Der geringere Leistungsstand in der Provinz Nordirland wird sowohl auf Gesamthohe wie auf industrielles Niveau einzelner Industrien hin analysiert. Auf industrieller Ebene gibt es in Nordirland in den meisten Industriebranchen weniger Betriebe, in denen Spitzenleistungen erreicht wurden, und zu wenig Betriebseroffnungen und - schliessungen um die herstellende Industrie von den schlimmsten Betrieben zu befreien, und diejenigen, die eroffnet oder geschlossen werden, erreichen nicht die Leistungsstande, die dazu geeignet waren, eine Verbesserung der Gesamtleistungshohe zu bewirken. Die Hauptschlussfolgerung lauft darauf hinaus, dass Nordirland die hohe Anzahl schwacher Nachzuglerbetriebe verringern muss, die Durchschnittsleistung hinunterziehen. Dies konnte durch vermehrte Betriebsaufhebung und-neugrundung erreicht werden, wobei weniger leistungsfahige Betriebe durch leistungsfahigere ersetzt werden.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Regional Studies.

Volume (Year): 35 (2001)
Issue (Month): 6 ()
Pages: 519-534

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Handle: RePEc:taf:regstd:v:35:y:2001:i:6:p:519-534

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Keywords: Efficiency Frontier Production Functions Plant Level Northern Ireland;

References

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  1. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
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Cited by:
  1. Richard Harris, 2008. "Models of Regional Growth: Past, Present and Future," SERC Discussion Papers 0002, Spatial Economics Research Centre, LSE.
  2. Richard Harris & John Moffat, 2011. "Plant-level determinants of total factor productivity in Great Britain, 1997-2006," LSE Research Online Documents on Economics 33561, London School of Economics and Political Science, LSE Library.
  3. Fabrizio Erbetta & Carmelo Petraglia, 2011. "Drivers of Regional Efficiency Differentials in Italy: Technical Inefficiency or Allocative Distortions?," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 42(3), pages 351-375, 09.

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