Productive Efficiency and Territorial Externalities in Small and Medium‐Sized Industrial Firms: A Dynamic Analysis of the District Effect

Abstract

A series of works have analysed differential behaviour in terms of productive efficiency between companies inside a hypothetical industrial district and those outside the district. This objective has been addressed using measures of technical efficiency. The results obtained provide valuable information for quantifying the district effect at a given moment in time. However, constant changes in the market and business behaviour mean that it is worthwhile studying the business district effect from a dynamic point of view. In this study, we provide this new vision through the use of Malmquist productivity indices. This methodology enables us to analyse possible differential evolutions by comparing the productive efficiency of companies inside and outside a district over a period of time. An empirical application has been made on a set of small and medium‐sized Spanish ceramic producers during the period of economic expansion between 1996 and 2007.

Spatio‐temporal dynamics of technical efficiency in China’s specialized markets: A stochastic frontier analysis approach

“…From the perspective of input, technical efficiency refers to the ratio of the ideal minimum possible input of the production unit to the actual input at the same output. From the perspective of output, technical efficiency refers to the ratio of the actual output of the production unit to the ideal maximum possible output at the same input (Hernandez et al, 2012). As a comprehensive function of production division, supply chain system and sales window, specialized markets involves a large number of human resources, capital, technology, institutional innovation, and other inputs to achieve better home market effects, as well as export competitive advantage, in an attempt to achieve the optimization of output.…”

Competitive advantage and industrial district

“…The preceding works analyze the differential behavior in terms of efficiency between firms located inside or outside an industrial district. For Hernández-Sancho et al (2012), the results obtained in these studies are suited to characterize the district effect at a given point CR 29,3 in time: nevertheless, the dynamic nature of the market, together with firms' constant need to change, suggest the convenience of examining the district effect from a dynamic perspective. In this sense, a considerable number of contributions have striven to incorporate that dynamism into the analysis using longitudinal studies (Becchetti and Castelli, 2005;Cainelli and De Liso, 2005;Lamieri and Sangalli, 2013;Puig and Marques, 2011).…”

“…The empirical application undertaken by Hernández-Sancho et al (2012) on a sample of industrial firms belonging to the ceramic sector in Spain during the period 1996-2007 shows that district firms experience a higher growth of productivity. This fact is mainly attributed to external economies which, according to these authors, play a more important role in the explanation of business productivity improvements than changes of scale or technical progress.…”

Assessment of Neighborhood and Spillover Effects on Technical Efficiency of Irrigated Rice Farmers

“…Its specification for cross-sectional data involves a production function, which has an error term with two components: one to account for random effects and the other to account for technical inefficiency. This approach has been used in studies to analyze technical efficiencies in industrial firms in Spain (Hernandez-Sancho et al 2012), swine production in Hawaii (Sharma, Leung, and Zaleski 1999), plantain production industry in Nigeria (Bifarin et al 2010), tomato farms in northern Pakistan (Khan 2012), and rice production in China (Fan 1999), Brunei Darussalam (Galawat and Yabe 2012), and the Philippines (Villano and Fleming 2004;Pate and Tan-Cruz 2007;Luis et al 2010;Gomez and Neyra 2010;Koirala, Mishra, andMohanty 2013, 2016). Areal, Balcombre, and Tiffin (2012) noted that the assessment of economic processes such as efficiency estimates in agricultural production is a spatial phenomenon.…”