Measuring the productive efficiency of a group of firms

Sung Ko LI; Ying Chu NG

doi:10.1007/BF02295790

Measuring the productive efficiency of a group of firms

Sung Ko LI^*, Ying Chu NG

^*Corresponding author for this work

Research output: Contribution to journal › Journal article › peer-review

74 Citations (Scopus)

Abstract

While the conventional Farrell-Färe approach to efficiency measurement can identify the most inefficient firms, it fails to consider the efficiency of a group of firms thoroughly. This paper introduces efficiency measures that can be used to find the efficiency of a group of firms and pinpoint whether the group inefficiency is due to inefficiency inside or outside individual firms. Furthermore, a new way of finding the revenue maximum shadow price vector is introduced to compute the allocative efficiency of individual firms when price data are not available.

Original language	English
Pages (from-to)	377-390
Number of pages	14
Journal	International Advances in Economic Research
Volume	1
Issue number	4
DOIs	https://doi.org/10.1007/BF02295790
Publication status	Published - Nov 1995

Scopus Subject Areas

Economics and Econometrics
Economics, Econometrics and Finance(all)

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10.1007/BF02295790

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AB - While the conventional Farrell-Färe approach to efficiency measurement can identify the most inefficient firms, it fails to consider the efficiency of a group of firms thoroughly. This paper introduces efficiency measures that can be used to find the efficiency of a group of firms and pinpoint whether the group inefficiency is due to inefficiency inside or outside individual firms. Furthermore, a new way of finding the revenue maximum shadow price vector is introduced to compute the allocative efficiency of individual firms when price data are not available.

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Measuring the productive efficiency of a group of firms

Abstract

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