Long run properties of technical efficiency in the US airline industry

Arbeitspapier

This paper takes an innovative approach to test the relationship between technical efficiency and the market structure hypothesis which states that competitive pressure enhances relative efficiency. DEA and FDH time series of technical efficiency scores, for a panel of 11 US airlines observed quarterly during 1970-1990, are examined for cointegration and convergence. For almost all firm pairs (>90% for both efficiency measures), the null hypothesis of cointegration cannot be rejected; meanwhile, the null of no cointegration is rejected for approximately one-third of the firm pairs. Furthermore, convergence tests document less dispersion in firm performance over time. These results indicate that the scores move together and, in fact, the firms are becoming more alike one another in terms of efficiency.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. FS IV 97-25

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Alam, Ila M. Semenick ; Sickles, Robin C.
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 1997

Further information

• Handle: http://hdl.handle.net/10419/50987
• Last update: 10.03.2025, 11:44 AM CET