Abstract
In this study we evaluate the efficiency of the firms with DEA technique and bootstrapping procedure in eleven transition economics among sixth industrial and service sectors in a cross-section 2005. At the second stage, we study the relationship between corrected efficiency scores and possible explanatory variables. On one hand, our result shows statistically significant differences in efficiency levels across countries and sectors. Likewise, significant levels of inefficiency are identified especially in service sectors (Hotels and Restaurants, Retail and Wholesale and Transport). On the others hand, the results of the analysis in second stage confirmed the existence of a significant relationship between the country that firms operate (country-effect) and firm′s age (learning by doing). The latter relationship between age and efficiency has different behaviors according to the sector concerned, in the form of U shape in the Hotels and Restaurants, inverted U shape in Metal and Machinery and Wood and Furniture and linear in the Retail and Wholesale sector. Contrary perhaps to expectations, the results also allow us to conclude that there is no important statistically significant relationship between the efficiency and variables related to the strategies implemented by firms and the control of the property.
Highlights
In this paper we evaluate efficiency of the firms in transition economics
We found statistically significant differences in efficiency levels across countries and sectors
As mentioned by (Daraio and Simar 2006), the Data Envelopment Analysis (DEA) efficiency score is a performance indicator obtained by comparing each firm with the best performers of its objective group; i.e. the benchmarking is, in a certain sense, severe for each firm and sensitive to extremely performing firms to answer these comments, (Simar and Wilson 1998, 2000) and others have introduced bootstrapping into DEA framework
Summary
In this paper we evaluate efficiency of the firms in transition economics. We take eleven countries as a subject of investigation. We are not aware of the existence of numerous studies conducted comparative studies of efficiency and theirs explanatory factors at firms-level in transition economics. These include Kravtsova 2008 who investigates foreign presence in the performance of domestic manufacturing firms for five transition countries (Bulgaria, Estonia, Hungary, Poland and Romania). These authors explore how much Lithuanian, Latvian and Estonian ranking according to estimated development level differs due to variations of approaches applied, and how sensitive calculations are to institutional performance and current economic downturn Taking into account this empirical background, in this study, we use a two-stage approach.
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