What causes cross-industry differences of technical efficiency? An empirical investigation

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Freiberger Arbeitspapiere ; No. 2004/13

Classification and Topics

• Classification: Wirtschaft ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Market Structure, Firm Strategy, and Market Performance: General ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Subject: Technical efficiency ; cross-industry study ; efficiency distribution ; Technische Effizienz ; Branchenunterschiede ; Effizienzverteilung ; Technische Effizienz ; Branche ; Kostenstruktur ; Schätzung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fritsch, Michael ; Stephan, Andreas
• Event: Veröffentlichung
• (who): Technische Universität Bergakademie Freiberg, Fakultät für Wirtschaftswissenschaften
• (where): Freiberg
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/48369
• Last update: 10.03.2025, 11:45 AM CET