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

82 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

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10.1007/BF02295790

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abstract = "While the conventional Farrell-F{\"a}re 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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AU - Ng, Ying Chu

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N2 - 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.

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.

UR - https://www.scopus.com/pages/publications/0000541783

U2 - 10.1007/BF02295790

DO - 10.1007/BF02295790

M3 - Journal article

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VL - 1

SP - 377

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JO - International Advances in Economic Research

JF - International Advances in Economic Research

IS - 4

ER -

Measuring the productive efficiency of a group of firms

Abstract

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