Estimating Technical Inefficiency: An Empirical Approach to E.U. Industries

Aikaterini Kokkinou

Department of Economics, University of Glasgow

Abstract:
This paper estimates, incorporating a Transcendental Logarithmic Production Function, the technical efficiency level of different industries in selected E.U. countries. The paper considers panel data for inefficiency effects in stochastic production frontier based on Battese and Coelli (1995), providing translog effects, as well as industry effects. The empirical model accommodates not only heteroscedasticity but also allows the possibility that an industry may not always produce the maximum possible output, given the inputs. Unlike most studies, the paper estimates time – varying technical efficiencies (incorporating „learning – by doing‟ behaviour) as industry-specific fixed effects. Furthermore, the model decomposes total factor productivity (TFP) growth into two components: technological growth (essentially, a shift of production possibility frontier, set by best-practice enterprises) and inefficiency changes (i.e., deviations of actual output level from the production possibility frontier). read more

Key Words: Efficiency, Technical Inefficiency, Stochastic Frontier Model

Identifying Regional Cluster Management Potentials: Empirical Results from Three North Rhine-Westphalian Regions

Rüdiger Hamm
Niederrhein Institute for Regional and Structural Research
Niederrhein University of Applied Sciences
Germany

Christiane Goebel
Niederrhein Institute for Regional and Structural Research
Niederrhein University of Applied Sciences
Germany

Abstract:
The development and support of clusters is an issue that became quite popular by players dealing with regional economic policy. But before a regional development agency can start to implement a cluster-oriented strategy there a two question that have to be answered: 1. What are the regional fields of competence (cluster potentials) that fulfill the requirements for a cluster-oriented regional development policy? 2. If you find such regional fields of competence, are the enterprises willing to cooperate in a network? The present paper describes an approach used in several analyses. On the one hand fields of competence were identified by a two stage procedure. On the other hand the firms that were identified in that procedure were questioned about their willingness for networking. The results of the surveys show the interest of the firms for networking and give some additional information on the subjects and partners for networking. read more

Key words: Cluster, networking, regional development policy, firm survey

Spillover Diffusion and Regional Convergence: A Gravity Approach

Guastella Giovanni
Doctoral School in Economic Policy, Catholic University, Piacenza, Corresponding author

Timpano Francesco
Department of Economics and Social Sciences, Catholic University, Piacenza

Abstract:
Among the different sources of regional growth, agglomeration economies, both internal to regions and external to regions (spillovers) play a primary role. However the presence of agglomeration economies may obstacle the path toward cohesion making rich (poor) regions become richer (poorer). While, according to New Growth Theory and New Economic Geography, there is no doubt that internal economies may lead to divergence, the debate on the role of external economies on convergence is still open. Much, of course, depends on the spatial extension of spillovers. The aim of this work is to study the spatial dimension of spillovers using the framework of cross-region growth regression. In particular we seek to explain whether the intensity of spillover is either completely exogenous or it can be explained by some endogenous regional characteristics. Results indicate that the intensity of externalities is determined by a) the regional geographical position and b) the distance from neighbors with high growth rates. While the first is completely exogenous, the second is not. Curiously enough, infrastructural endowments and factors commonly assumed to induce agglomeration do not contribute to explain the intensity of spillovers. Results have important policy implications. Since spillovers characterize more core regions, which are well connected to other rich regions, than periphery, the presence of these externalities may foster the increase of disparities between core and periphery, making harder to reach the objective of cohesion. read more

JEL: R11, O18
Keywords: spatial econometrics, regional growth, spillovers, gravity models