An industry and country analysis of technical efficiency in the European Union, 1980-2005.
PhD thesis, University of Glasgow.
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The research aim of this research is to identify and examine key resources, a conceptual framework drawing on the application of stochastic frontier models in obtaining measures of efficiency that enable a comparison of performance across industries and countries, explaining why, in the same country, some industries achieve superior efficiency performance. The important task is to relate efficiency to a number of factors that are likely to be determinants, and measure the extent to which they contribute to the presence of inefficiency.
More specifically, the first step of this thesis is to review the literature concerned with techniques of efficiency estimation. This will facilitate an understanding of both the theoretical and application part of the research. The second step of this thesis is to highlight the pitfalls of the different relevant models and methodologies. The third and most important goal and contribution of this thesis is to suggest a concrete method to estimate industrial efficiency, avoiding the inherent problems.
This thesis considers a European Union perspective efficiency analysis to increase the information base and derive broader conclusions about European Union productive performance within selected countries. This issue is of particular research relevance because empirical evidence shows that even though European Union industries are widely analyzed with respect to performance, yet little attention has been paid to the estimation of technical efficiency. Within this sample, it is of great importance to examine which determinants are significant, however, it is also important, to examine whether the interactions between technical progress, ICT investment, ICT investment share, R&D stock and economy openness, namely the process of the integration into the world economy, has any implications for technical efficiency. Special emphasis is given to the review of two of the main heterogeneity determining factors, namely innovation investments (as a proxy of knowledge creation) and economy openness (as a proxy of knowledge dissemination).
In particular, this thesis explores whether the interactions between these factors have any implications for efficiency growth, and whether there are any complementarities between them and fostering technical efficiency growth. More specifically, this thesis aims to distinguish between the two main factors which affect total factor productivity, namely technical progress and technical efficiency, as well as what determines the production frontier itself and what determines the inefficiency term (both theoretically and empirically).
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