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Technical efficiency measurement within the manufacturing sector in Cote d'Ivoire: A stochastic frontier approach

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  • Karine Chapelle
  • Patrick Plane

Abstract

This article analyses the productive performance in four manufacturing sectors of the Ivorian economy: textiles and garments, metal products, food processing, wood and furniture. To appraise the productive performance, econometric production frontier models are estimated, illustrating the maximum output attainable from a given quantity of inputs. The frontier and firm efficiency scores are derived from stochastic production functions estimated on cross-sectional data. The stochastic specification of the models allows for the decomposition of the error term into two components, one the normal random effect and the other to account for technical inefficiency that we explain by various exogenous variables describing the economic and institutional environment. Firm size proves to be a statistically significant determinant of the productive performance. Across the four sectors, the positive impact of being large compensates the negative effect of a formal institutional status in an environment where government regulations still prevail.

Suggested Citation

  • Karine Chapelle & Patrick Plane, 2005. "Technical efficiency measurement within the manufacturing sector in Cote d'Ivoire: A stochastic frontier approach," Journal of Development Studies, Taylor & Francis Journals, vol. 41(7), pages 1303-1324.
  • Handle: RePEc:taf:jdevst:v:41:y:2005:i:7:p:1303-1324
    DOI: 10.1080/00220380500170964
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    References listed on IDEAS

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    1. Plane, Patrick, 1999. "Privatization, Technical Efficiency and Welfare Consequences: The Case of the Cote d'Ivoire Electricity Company (CIE)," World Development, Elsevier, vol. 27(2), pages 343-360, February.
    2. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Cathy Patillo & Måns Soderbom & Francis Teal & Albert Zeufack, 2000. "Contract flexibility and dispute resolution in African manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 36(4), pages 1-37.
    3. Bigsten, Arne, et al, 2000. "Rates of Return on Physical and Human Capital in Africa's Manufacturing Sector," Economic Development and Cultural Change, University of Chicago Press, vol. 48(4), pages 801-827, July.
    4. Cornwell, C. & Schmidt, P., 1993. "Production Frontiers and Efficiency Measurement," Papers 427e, Georgia - College of Business Administration, Department of Economics.
    5. Gauthier, Bernard & Gersovitz, Mark, 1997. "Revenue erosion through exemption and evasion in Cameroon, 1993," Journal of Public Economics, Elsevier, vol. 64(3), pages 407-424, June.
    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 325-332.
    7. 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.
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    Cited by:

    1. Masakure, Oliver & Cranfield, John & Henson, Spencer, 2008. "The Financial Performance of Non-farm Microenterprises in Ghana," World Development, Elsevier, vol. 36(12), pages 2733-2762, December.
    2. José Contreras & Andrés Santeliz & Oscar Carvallo, 2012. "Patterns of technical efficiency in the Venezuelan manufacturing sector (2007)," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 37(34), pages 121-137, July-Dece.
    3. Karine Chapelle & Patrick Plane, 2005. "Productive Efficiency In The Ivorian Manufacturing Sector: An Exploratory Study Using A Data Envelopment Analysis Approach," The Developing Economies, Institute of Developing Economies, vol. 43(4), pages 450-471, December.
    4. Carlos Barros & Guglielmo Caporale, 2012. "Banking Consolidation in Nigeria," CEsA Working Papers 99, CEsA - Center for African, Asian and Latin American Studies.
    5. Guglielmo Maria Caporale & Carlos Pestana Barros, 2013. "Banking Consolidation in Nigeria, 2000-2010," NCID Working Papers 07/2013, Navarra Center for International Development, University of Navarra.
    6. Justin Bem & Pierre Joubert Nguetse Tegoum & Tatiana Morel Samo Tcheeko & Jacksone Essoh, 2013. "Efficience de production du secteur informel non-agricole et réduction de la pauvreté au Cameroun," Working Papers PMMA 2013-06, PEP-PMMA.
    7. Abiola Babajide Ph.D, 2012. "Effects of Microfinance on Micro and Small Enterprises (MSEs) Growth in Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(3), pages 463-477, July.

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