Technical efficiency and dimension of the firm: Some results on the use of frontier production functions

Abstract

Estimates of the average technical efficiency on the 2-digit industry-level for France (1962) are obtained by means of a maximum likelihood estimation of the Cobb-Douglas frontier production model with composed error. The theoretical and statistical implications of a possible relationship between technical efficiency and firm-size are discussed. The computations are carried out for each industry as a whole and the results are compared with the respective results for separate size-classes.

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