Measuring Efficiency in Northern Ireland Manufacturing Using a Frontier Production Function Approach.

There have been few attempts to directly measure efficiency at a regional level, especially within the U.K. context. This study estimates a cross-section production function using a frontier approach and data drawn from individual firms. It therefore provides direct estimates of the inefficiency and the extent to which it varies across sectors. Furthermore, an attempt to explain the causes of inter-firm differences in inefficiency has been undertaken, in order to provide some guidelines for regional policymakers. The outcome of this latter exercise suggests that scale economies are important, as is the employment composition of the firm and the availability of adequately trained personnel in the regional labor market; external ownership of firms has brought some positive benefits for efficiency. Copyright 1991 by Scottish Economic Society.