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Labour-use Efficiency in the Italian Machinery Industry: a Non-parametric Stochastic Frontier Perspective

Author

Listed:
  • Ferrara, Giancarlo
  • Vidoli, Francesco
  • Canello, Jacopo
  • Campagna, Arianna

Abstract

Firms’ efficiency is a mainstream in the study of economic growth. Within this broad research area, the present work, conducted as part of the research activities of SOSE S.p.A., analyses the labour use efficiency in the Italian machinery industry through the application of a non-parametric stochastic frontier model with the aim of suggesting new insights to better understand the recent dynamics of the Italian manufacturing system. An extended panel data of manufacturing Small and Medium Enterprises (SMEs) operating in the mechanical industry for the period 2002-2012 has been extracted (in anonymous form) from the Italian Ministry of Economy and Finance annual survey and used for the implementation of the proposed method. Results show the presence of a persistent level of labour-use inefficiency in the sample used for the analysis: this issue is particularly evident for the subset of firms using non standard jobs, while firms entitled to access to wage redundancy fund appear to have achieved higher levels of efficiency in labour input use on average. The analysis also shows that the inefficiency gap between the two subsets of firms tends to reduce in absolute terms over time

Suggested Citation

  • Ferrara, Giancarlo & Vidoli, Francesco & Canello, Jacopo & Campagna, Arianna, 2013. "Labour-use Efficiency in the Italian Machinery Industry: a Non-parametric Stochastic Frontier Perspective," MPRA Paper 94359, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:94359
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    References listed on IDEAS

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    More about this item

    Keywords

    Labour-use efficiency; Stochastic frontier; SMEs; GAM; Splines;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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