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Microeconomic Adjustment During Structural Reforms: The Nicaraguan Manufacturing Sector 1991-1995


  • Isgut, Alberto

    () (Department of Economics, Wesleyan University)

  • Tello, Mario

    (Universidad Catolica del Peru)

  • Veiderpass, Ann

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)


The main rationale for the implementation of structural reforms favoring free markets is that they, through increased competition, are likely to create incentives to improve the way firms operate i.e. firm efficiency. In this study we measure and analyze total factor productivity and technical efficiency in a large sample of Nicaraguan manufacturing firms. Our analysis indicates that whereas structural reforms may be necessary conditions for the development of developing economies, their expected positive effects on sources of growth such as total factor productivity and technical efficiency could be so slow that it may be necessary to develop sufficient conditions or policy instruments for spurring economic growth in the short run.

Suggested Citation

  • Isgut, Alberto & Tello, Mario & Veiderpass, Ann, 1998. "Microeconomic Adjustment During Structural Reforms: The Nicaraguan Manufacturing Sector 1991-1995," Working Papers in Economics 11, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0011

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    References listed on IDEAS

    1. McFadden, Daniel, 1978. "Cost, Revenue, and Profit Functions," Histoy of Economic Thought Chapters,in: Fuss, Melvyn & McFadden, Daniel (ed.), Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 1 McMaster University Archive for the History of Economic Thought.
    2. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    3. Banker, R. D. & Bardhan, I. & Cooper, W. W., 1996. "A note on returns to scale in DEA," European Journal of Operational Research, Elsevier, vol. 88(3), pages 583-585, February.
    4. Banker, Rajiv D., 1984. "Estimating most productive scale size using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 17(1), pages 35-44, July.
    5. Hjalmarsson, Lennart & Veiderpass, Ann, 1992. " Productivity in Swedish Electricity Retail Distribution," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(0), pages 193-205, Supplemen.
    6. Hanoch, Giora, 1970. "Homotheticity in joint production," Journal of Economic Theory, Elsevier, vol. 2(4), pages 423-426, December.
    7. John C. Panzar & Robert D. Willig, 1977. "Economies of Scale in Multi-Output Production," The Quarterly Journal of Economics, Oxford University Press, vol. 91(3), pages 481-493.
    8. Starrett, David A, 1977. "Measuring Returns to Scale in the Aggregate, and the Scale Effect of Public Goods," Econometrica, Econometric Society, vol. 45(6), pages 1439-1455, September.
    9. Simar, Leopold & Wilson, Paul W., 2002. "Non-parametric tests of returns to scale," European Journal of Operational Research, Elsevier, vol. 139(1), pages 115-132, May.
    10. N/A, 1996. "Note:," Foreign Trade Review, , vol. 31(1-2), pages 1-1, January.
    11. Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September.
    12. Kim, H Youn, 1987. "Economies of Scale in Multi-product Firms: An Empirical Analysis," Economica, London School of Economics and Political Science, vol. 54(214), pages 185-206, May.
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    Cited by:

    1. Mario D. Tello, 2005. "Do Developing Countries Benefit from Antidumping Laws? An Assessment Based upon a Theoretical Dumping Model," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 2(1), pages 3-35, Julio-Dic.
    2. Veiderpass, Ann & Andersson, Per-Åke, 2009. "Is aid the capital component making countries efficient?," Working Papers in Economics 333, University of Gothenburg, Department of Economics.

    More about this item


    Central America; Nicaragua; Productivity; Efficiency; Manufactures; Exports;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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