Productive Performance in West German Manufacturing Industry 1970-80: A Farrell Frontier Characterisation

Abstract

Some measure of the success with which economic resources are utilised lies at the heart of any meaningful indicator of economic performance. A traditional and obvious point of departure is to say that for a given state of technical knowledge and initial endowments of factor inputs, resource allocation depends on the degree of ability to transform inputs into outputs and the relative returns which these resources can earn. In this paper, the more recent productive performance of the West German manufacturing sector is appraised from one particular viewpoint whilst remaining firmly within what might be called the conventional framework of relating outputs to the factor inputs labour and capital'. Section II provides an initial brief overview of the West German manufacturing sector over the period I 970-80, in which some of the more interesting trends are noted for a more detailed analysis in later sections. Section III sets out the approach used. Again, this is not very extensive given the relatively well documented nature of the methodology. Section IV takes the form of some notes on the data used with a more substantial Section V containing the major analysis. Some more general observations and concluding comments are brought together in a final Section VI.