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Institutional Complexity and Managerial Efficiency: A Theoretical Model and an Empirical Application


  • M. Jara
  • D. Forrest
  • D. Paolini



This paper studies the effect of the level of a firm?s resources on managerial inefficiency. We motivate our analysis with a theoretical model which predicts that better resourced and therefore more complex institutions tend to be more likely to generate x-inefficiency. The empirical analysis estimates stochastic production frontiers for Chilean and Italian football and finds that, consistent with the theoretical predictions, team performance in the Chilean League is mainly explained by institutional factors related to the level of resources available to a club whereas team performance in the Italian League appears in addition to be related to technical decisions taken by management.

Suggested Citation

  • M. Jara & D. Forrest & D. Paolini, 2010. "Institutional Complexity and Managerial Efficiency: A Theoretical Model and an Empirical Application," Working Paper CRENoS 201005, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:201005

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    Cited by:

    1. Bianca Biagi & Alessandra Faggian & Philip McCann, 2011. "Long and Short Distance Migration in Italy: The Role of Economic, Social and Environmental Characteristics," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(1), pages 111-131.

    More about this item


    sport economics; stochastic production frontier; managerial efficiency;

    JEL classification:

    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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