Measurement and Sources of Technical Inefficiency in Ethiopian Manufacturing Industries
| dc.contributor.advisor | Jeyapaul, Joseph (Dr.) | |
| dc.contributor.author | Gebrehiwot, Daniel | |
| dc.date.accessioned | 2021-07-27T14:41:30Z | |
| dc.date.accessioned | 2023-11-04T10:30:26Z | |
| dc.date.available | 2021-07-27T14:41:30Z | |
| dc.date.available | 2023-11-04T10:30:26Z | |
| dc.date.issued | 2005-07 | |
| dc.description.abstract | The inability of firms to operate at full capacities ,the low levels of manufactured exports and the decline of labour and capital productivities for the past ten years are some reflections of technical inefficiencies among the Ethiopia manufacturing industries. In light of this ,the level of technical efficiencies and factors that attributable to the existing level of technical inefficiencies are investigated simultaneously using a panel data of 361 firms which are categorized under nine industrial groups during the study period ie1998-2022. A translog stochastic frontier production function is found to better represent the production technology of food processing beverage, textile , wood & furniture ,paper & printing ,rubber & plastic and non- metallic mineral industries and a Cobb- Douglas stochastic frontier function is found to be a better representation for leather and chemical industries . A half - normal distribution for the inefficiency term is found to be a better assumption for predicting the technical efficiency levels for all sub-sector , except for food processing industries where the truncated normal distribution for inefficiencies among the firms in food processing industries . the null hypothesis that all firms in each sub- sector are fully technically efficient is rejected for all sub- sector which proves the in appropriateness of (average ) production function . most of the discrepancy between observed and the frontier level of out put was due to technical inefficiency rater than external factors that are outside firm’s control for all sub –sectors . This result indicated the existence of technical inefficiency among the Ethiopian. manufacturing industries and there is a chance at least in the short run to increase their production only by improving their technical efficiency. The null hypothesis that the inefficiency effects are not functions of the explanatory variables is also rejected for all sub-sectors. The predicted technical efficiencies for each sub-sector are estimated using the maximum like hood estimation technique indicating that there exist technical inefficiency among the firms in each sub-sector and the mean technical efficiencies are ranged between 62and 80 percent . generally ,firms size age of a firm type of ownerships ,firms location around Addis Ababa and the amount of incentive paid to workers are found to be important variables in explaining the variation in technical efficiency among the firms. Moreover , firms size and age of a firm tended to have anon- liner relationship with the level of technical inefficiency for most firms was decreasing during the study period for most sub- sector s, except for textile and technical industries. Hence based on the r results of credit ,better marketing strategies , training, of workers, accelerating the slow pace of privatization and designing effective incentive payment strategies so that the existing levels of technical efficiencies could be enhanced and the level of production of the industries could be improved | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/27384 | |
| dc.language.iso | en | en_US |
| dc.publisher | A.A.U | en_US |
| dc.subject | Ethiopian manufacturing industries, Technical efficiency, stochastic frontier production Functions. | en_US |
| dc.title | Measurement and Sources of Technical Inefficiency in Ethiopian Manufacturing Industries | en_US |
| dc.type | Thesis | en_US |