Resource title

What Causes Cross-industry Differences of Technical Efficiency?: An Empirical Investigation

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Resource description

Using micro-level panel data of about 35,000 firms from the German Cost Structure Census, we analyze the differences of technical efficiency across industries. Technical efficiency is estimated by firms? fixed effects. One striking result is that the distribution of technical efficiency across industries is positively skewed. This is because the efficiency distribution is truncated at the lower end due to the least efficient firms which exit the market. We investigate the causes of technical efficiency differences across industries. Our econometric analyses provide evidence that capital and human capital intensity, the degree of vertical specialization as well as new firm formation rate are important for explaining the average technical efficiency of an industry.

Resource author

Michael Fritsch, Andreas Stephan

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Resource language

eng

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text/html

Resource resource URL

http://hdl.handle.net/10419/18309

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Adapt according to the presented license agreement and reference the original author.