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PRODUCTIVE EFFICIENCY IN THE IVORIAN MANUFACTURING SECTOR: AN EXPLORATORY STUDY USING A DATA ENVELOPMENT ANALYSIS APPROACH
Author(s) -
CHAPELLE KARINE,
PLANE PATRICK
Publication year - 2005
Publication title -
the developing economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.305
H-Index - 30
eISSN - 1746-1049
pISSN - 0012-1533
DOI - 10.1111/j.1746-1049.2005.tb00954.x
Subject(s) - data envelopment analysis , production (economics) , industrial organization , frontier , production–possibility frontier , clothing , manufacturing sector , scale (ratio) , business , efficient frontier , productive efficiency , economics , environmental economics , microeconomics , mathematics , statistics , labour economics , physics , archaeology , quantum mechanics , history , portfolio , finance
The African industrial structure is characterized by firm‐size heterogeneity with the coexistence of small, if not micro, enterprises in the informal sector and large formal organizations operating with modern technology. In this paper, using the Data Envelopment Analysis production frontier methodology, we investigate the technical efficiency of Ivorian manufacturing firms in four sectors of economic activity: textiles and garments, metal products, food processing, and wood and furniture. Efficiency scores are adjusted to take into account the impact of the external operating environment. These scores are then broken down into three elements: the purely managerial effect, the impact of the scale of production, and a technological effect capturing the potential gain that could result from the adoption of modern technology by small informal organizations. Not only formal activities prove to be more efficient in scaling their production but also, they greatly benefit from their modem technology.