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Efficiency Measure from Dynamic Stochastic Production Frontier: Application to Tunisian Textile, Clothing and Leather Industries

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  • Rym Ben Ayed Mouelhi

    (Institut Superieur de Comptabilite et d'Administration des Entreprises (ISCAE))

  • Mohamed Goaied

Abstract

This paper is concerned with the estimation of firm and time-varying technical efficiency. The approach used to measure efficiency is different from the conventional static and stochastic frontier approach. We focus here on dynamic adjustment in attaining a target level of production. Technical inefficiency is modeled via an error correction type model. The main objective is to investigate the development of efficiency over time, the rate of technical change and the productivity growth. Estimation of a dynamic error components model is considered. The empirical analysis is based on an unbalanced panel data consisting of 388 firms from the Tunisian textile, clothing and leather industries (TCL) observed during 1983-1994. The mean efficiency score is found to be of 63 percent and there is no evidence of continuous increase in efficiency. We observe a technical regress during the period. We find that exporting firms are more efficient than the non-exporting ones and that the decline in efficiency is more pronounced for the non-exporting firms. Productivity growth rates are negative with a mean of -4 percent.

Suggested Citation

  • Rym Ben Ayed Mouelhi & Mohamed Goaied, 2002. "Efficiency Measure from Dynamic Stochastic Production Frontier: Application to Tunisian Textile, Clothing and Leather Industries," Working Papers 0235, Economic Research Forum, revised 31 Nov 2002.
    • Handle: RePEc:erg:wpaper:0235
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    1. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    2. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    3. Mohamed Goaïed & Rym Ayed-Mouelhi, 2000. "Efficiency Measurement With Unbalanced Panel Data: Evidence from Tunisian Textile, Clothing and Leather Industries," Journal of Productivity Analysis, Springer, vol. 13(3), pages 249-262, May.
    4. Ahn, Seung C. & Schmidt, Peter, 1997. "Efficient estimation of dynamic panel data models: Alternative assumptions and simplified estimation," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 309-321.
    5. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
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    Cited by:

    1. Fethi AMRI & Rim MOUELHI, 2013. "Productivity Growth And Competition In Tunisian Manufacturing Firms," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 37, pages 37-64.
    2. Elitsa R. Banalieva & Michael D. Santoro & Joy Ruihua Jiang, 2012. "Home Region Focus and Technical Efficiency of Multinational Enterprise," Management International Review, Springer, vol. 52(4), pages 493-518, August.
    3. Aditi Bhattacharyya, 2012. "Adjustment of inputs and measurement of technical efficiency: A dynamic panel data analysis of the Egyptian manufacturing sectors," Empirical Economics, Springer, vol. 42(3), pages 863-880, June.
    4. Coll Serrano, V. & Blasco Blasco, O.Mª., 2009. "Evolución de la eficiencia técnica de la industria textil española en el periodo 1995-2005. Análisis mediante un modelo frontera estocástica/Technical Efficiency In The Textile Industry Of Spain In Th," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 27, pages 779(32á)-77, Diciembre.
    5. Mohamed Ali Marouani & Rim Mouelhi, 2016. "Contribution of Structural Change to Productivity Growth: Evidence from Tunisia," Journal of African Economies, Centre for the Study of African Economies, vol. 25(1), pages 110-132.
    6. repec:dau:papers:123456789/11536 is not listed on IDEAS
    7. Massimiliano Agovino & Agnese Rapposelli, 2015. "Agglomeration externalities and technical efficiency in Italian regions," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(5), pages 1803-1822, September.
    8. Michael Gasiorek, 2007. "Determinants of Productivity in Morocco: The Role of Trade?," Working Papers 716, Economic Research Forum, revised 01 Jan 2007.

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