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Is theatre efficiency affected by the legal form type? A case study of German public theatres

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  • Marta Zieba

    (Department of Economics, University of Limerick)

Abstract

The paper aims at exploring the economic efficiency of the performing arts organisations. A parametric stochastic frontier approach is presented as a way of measuring the performance of cultural institutions. In particular, using German public theatres as a case study and summarising the empirical findings obtained in Zieba and Newman (2013), this paper examines how the efficiency of publicly funded performing arts firms, operating under different organisational structures, is affected by two types of shocks. First, we consider what happens to efficiency when there is a funding shock and second, we consider the effect on efficiency of an increase in competition. The identification of these effects was made possible by the natural experiment of the reunification of East and West Germany in 1990. The results suggest that theatres organised under public law are more efficient than theatres organised under private law. However, when exposed to the exogenous demand shock after reunification, the theatres organised under private law react positively to this competition shock as measured by their efficiency scores confirming that they better react to the changing market conditions than theatres organised as public legal forms.

Suggested Citation

  • Marta Zieba, 2013. "Is theatre efficiency affected by the legal form type? A case study of German public theatres," Working Papers WP032013, University of Limerick, Department of Economics, revised Jul 2013.
    • Handle: RePEc:lim:wpaper:032013
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    File URL: https://ul-econ.github.io/RePEc/pdf/ul-econ-wp-2013-03.pdf
    File Function: Revised version, July 2013
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    References listed on IDEAS

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    1. Anne-Kathrin Last & Heike Wetzel, 2010. "The efficiency of German public theaters: a stochastic frontier analysis approach," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(2), pages 89-110, May.
    2. Marta Zieba, 2011. "An Analysis of Technical Efficiency and Efficiency Factors for Austrian and Swiss Non-Profit Theatres," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(II), pages 233-274, June.
    3. Francisco Marco-Serrano, 2006. "Monitoring managerial efficiency in the performing arts: A regional theatres network perspective," Annals of Operations Research, Springer, vol. 145(1), pages 167-181, July.
    4. Gapinski, James H, 1984. "The Economics of Performing Shakespeare," American Economic Review, American Economic Association, vol. 74(3), pages 458-466, June.
    5. William Greene, 2004. "Distinguishing between heterogeneity and inefficiency: stochastic frontier analysis of the World Health Organization's panel data on national health care systems," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 959-980, October.
    6. Marta Zieba & Carol Newman, 2012. "Organisational Structure and Managerial Efficiency: A quasi-experimental analysis of German public theatres," Working Papers WP032012, University of Limerick, Department of Economics, revised Oct 2012.
    7. Gapinski, James H, 1980. "The Production of Culture," The Review of Economics and Statistics, MIT Press, vol. 62(4), pages 578-586, November.
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    Cited by:

    1. Miriam Sebova, 2018. "Economic Efficiency of Cultural Institutions: The Case of Museums in Slovakia," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 14(4), pages 203-214.

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    Keywords

    cultural economics; cultural management; theatre;
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