Being Efficient to Stay Strong in a Weak Economy. The Case of Calabrian Manufacturing Firms

Francesco Aiello, Concetta Castiglione

Department of Economics, Statistics and Finance, University of Calabria, Campus di Arcavacata di Rende, Cosenza, Italy.

DOI: 10.4236/ti.2014.52010                

Abstract

The aim of this work is to study the efficiency of firms operating in Calabria, a small and economically-lagging Italian region. The analysis is carried out by estimating a stochastic production frontier for an unbalanced panel of manufacturing firms which are observed over the 1998-2006 period. Results show that the efficiency score is, on average, about 60%. A declining trend is observed over the last three-year period, 2004-2006. Moreover, efficiency increases with firm age and when firms export. Inconclusive evidence is found for the role of investments in ICT and R&D. This is not very surprising given that private effort in technological activities is extremely low in Calabria (private R&D intensity was less than 0.075% of regional GDP in 2010).

Keywords

ICT, R&D, Stochastic Frontier, Calabria, Manufacturing Firms

Conflicts of Interest

The authors declare no conflicts of interest.

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