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Title:What Causes Cross-industry Differences of Technical Efficiency? An Empirical Investigation PDF Logo
Authors:Fritsch, Michael
Stephan, Andreas
Issue Date:2004
Series/Report no.:DIW-Diskussionspapiere 457
Abstract: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.
Subjects:Technical efficiency
cross-industry study
efficiency distribution
JEL:L11
D24
L10
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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