A spatial efficiency index proposal: an empirical application to SMEs productivity

Abstract

Our study introduces a Spatial Efficiency Index. Its definition is based on the traditional concepts of “technology set” and “distance function”, as well as on spatial econometric methods. This index measures productive efficiency in each productive unit in relation to its close environment, instead of comparing each unit with all others. This way both local efficiency patterns and the highest local efficiency inequalities can be identified. An empirical application was developed so as to analyse data from Small and Medium sized Spanish Industrial Enterprises, using nonparametric Data Envelopment Analysis techniques. Our proposal is a contribution to the development of indexes that explicitly include proximity relations—a field with countless research possibilities.