Open AccessHow efficient is the East German economy? An exploration with microdata
Author(s) -
Funke Michael,
Rahn Jörg
Publication year - 2002
Publication title -
economics of transition
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 51
eISSN - 1468-0351
pISSN - 0967-0750
DOI - 10.1111/1468-0351.00108
Subject(s) - german , frontier , german economy , panel data , stochastic frontier analysis , economics , west germany , east central europe , economy , economic system , economic geography , econometrics , macroeconomics , geography , political science , production (economics) , economic history , law , archaeology , politics
The purpose of this paper is to evaluate the efficiency of the East German economy at the firm level using an unbalanced panel over the transition period 1994 to 1998. We adopt a translog stochastic frontier model to estimate technical efficiency in eastern and western Germany. The results indicate that firms in eastern Germany are significantly less efficient than firms in western Germany. The paper also examines some of the possible correlates of regional variations in firm‐level efficiency. JEL classification: D24, C33, J31, O52.
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