Journal Archive

Home > Journal Archive
Cover Image
  • P-ISSN 1738-656X
Cite

한국개발연구. Vol. 12, No. 2, August 1990, pp. 51-79

https://doi.org/10.23895/kdijep.1990.12.2.51

× KDI Open Access is a program of fully open access journals to facilitate the widest possible dissemination of high-quality research. All research articles published in KDI JEP are immediately, permanently and freely available online for everyone to read, download and share in terms of the Creative Commons Attribution 4.0 International License.

Technical Inefficiency in Korea's Manufacturing Industries (Written in Korean)

유승민; 이인찬

Author & Article History

Manuscript .

Abstract

Research on technical efficiency, an important dimension of market performance, had received little attention until recently by most industrial organization empiricists, the reason being that traditional microeconomic theory simply assumed away any form of inefficiency in production. Recently, however, an increasing number of research effort shave been conducted to answer questions such as: To what extent do technical inefficiencies exist in the production activities of firms and plants? What are the factors accounting for the level of inefficiency found and those explaining the interindustry difference in technical inefficiency? Are there any significant international differences in the levels of technical efficiency and, if so, how can we reconcile these results with the observed pattern of international trade, etc.? As the first in a series of studies on the technical efficiency of Korea’ s manufacturing industries, this paper attempts to answer some of these questions. Since the estimation of technical efficiency requires the use of plant-level data for each of the five-digit KSIC industries available from the Census of Manufactures、one may consture the findings of this paper as empirical evidence of technical efficiency in Korea's manufacturing industries at the most disaggregated level. We start by clarifying the relationship among the various concepts of efficiency -allocative efficiency, factor-price efficiency, technical efficiency, Leibenstein's X-efficiency, and scale efficiency. It then becomes clear that unless certain ceteris paribus assumptions are satisfied, our estimates of technical inefficiency are in fact related to factor price inefficiency as well. The empirical model employed is, what is called, a stochastic frontier production function which divides the stochastic term into two different components-one with a symmetric distribution. A translog production function is assumed for the functional relationship between inputs and output, and was estimated by the corrected ordinary least squares method. The second and third sample moments of the regression residuals are then used to yield estimates of four different types of measures for technical (in)efficiency. The entire range of manufacturing industries can be divided into two groups, depending on whether or not the distribution of estimated regression residuals allows a successful estimation of technical efficiency. The regression equation employing value added as the dependent variable gives a greater number of “successful” industries than the one using gross output. The correlation among estimates of the different measures of effi­ciency appears to be high, while the estimates of efficiency based on different regres­sion equations seem almost uncorrelated. Thus, in the subsequent analysis of the determinants of interindustry variations in technical efficiency, the choice of the regression equation in the previous stage will affect the outcome significantly

JEL Code

L60

상단으로 이동

KDIJEP