The evidence on the existence of economies Of scale in local government units

2017 ◽  
Vol 1 (2) ◽  
pp. 379 ◽  
Author(s):  
Primož Pevcin
Keyword(s):  
Local Government ◽  
Economies Of Scale ◽  
Returns To Scale ◽  
Scale Economies ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Administrative Costs ◽  
Government Operation ◽  
Major Reform ◽  
Limited Scale

<p>The purpose of this paper is to empirically verify if the possible existence of scale economies actually supports the argument that municipal consolidation is needed in Slovenia. The major reform of local self-government in Slovenia was implemented in 1994, when the transformation of existing 58 »communal« municipalities was envisaged. From 1995 onwards, the number of municipalities increased to the current number of 212 municipalities. Consequently, the necessity to implement structural reforms of local self-government in Slovenia has been stressed. The arguments favoring municipal amalgamations stressed that country has become too fragmented and municipal amalgamation would enable the reduction of (administrative) costs, and increase efficiency as well as quality of services provided, indicating that technical aspects of local government operation are targeted. Following, technical efficiency of Slovenian municipalities is estimated with the Data Envelopment Analysis (DEA) method, in order to determine if (and which) municipalities are experiencing increasing returns to scale (i.e., scale economies). The results indicate that there is important scale efficiency component, and predominantly very small municipalities are experiencing economies of scale, but their number is relatively low. Therefore, one of the classical arguments for municipal amalgamation, achieving economies of scale, can only be applied at a limited scale. This does not imply that more extensive amalgamation is not warranted, but it demands that other arguments justifying municipal amalgamation should be presented.  </p>

Municipal Efficiency and Economies of Scale in Bosnia and Herzegovina

2018 ◽  
Vol 16 (4) ◽  
pp. 715-734 ◽  
Author(s):  
Aida Soko ◽  
Jelena Zorič
Keyword(s):  
Data Envelopment Analysis ◽  
Bosnia And Herzegovina ◽  
Economic Efficiency ◽  
Economies Of Scale ◽  
Positive Impact ◽  
Returns To Scale ◽  
Efficiency Score ◽  
Full Scale ◽  
Scale Efficiency ◽  
Data Envelopment

This study estimates municipal efficiency and economies of scale of municipalities in Bosnia and Herzegovina by employing data envelopment analysis (DEA) with variable (VRS) and constant (CRS) returns to scale. The results indicate low overall municipal efficiency, with economies of scale reached in very few municipalities. The average municipal efficiency score is 0.7115 under DEA VRS assumption, where only 16% of municipalities are found efficient. The average scale efficiency is 0.7458 with full scale efficiency reached by only 11% of municipalities in Bosnia and Herzegovina. Furthermore, the analysis shows strong positive impact of number of inhabitants on overall municipal efficiency. Politically motivated fragmentation of municipalities, aiming to bring peace and stability to the country, did not go hand in hand with improved economic efficiency.

scholarly journals Efficiency and Productivity Evaluation of the Moroccan Judicial System

2021 ◽  
Vol 17 (27) ◽  
pp. 282
Author(s):  
Yassine Achenchabe ◽  
Mohammed Akaaboune
Keyword(s):  
Technical Change ◽  
Economies Of Scale ◽  
Returns To Scale ◽  
Malmquist Index ◽  
Scale Efficiency ◽  
Productivity Change ◽  
Judicial Reform ◽  
Data Envelopment ◽  
Efficiency And Productivity ◽  
Positive Effect

This paper focuses on measuring the efficiency and productivity change in 110 Moroccan courts between 2013 and 2018, which is the period of implementation of the judicial reform. The study also measures the technical and scale efficiency using the Data Envelopment Analysis method under output orientation. The Malmquist index was used to measure the productivity change decomposed into efficiency and technical change. The results show a low level of courts efficiency of 53.2%, with increasing returns to scale for most courts except administrative ones. The total factor productivity of courts shows an improvement of 6.3%, mainly due to technical change, except for the commercial courts whose productivity deteriorated during the study period. These results show the positive effect of the reform. Courts still have a margin for improving their efficiency by increasing inputs in order to benefit from economies of scale or by improving judges' productivity.

Gas Distribution in Italy: A Non Parametric Analysis of Companies Operational Efficiency

2013 ◽  
Vol 838-841 ◽  
pp. 1972-1978 ◽  
Author(s):  
Corrado lo Storto
Keyword(s):  
Technical Efficiency ◽  
Returns To Scale ◽  
Scale Economies ◽  
Graphical Analysis ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Gas Industry ◽  
Density Measurements ◽  
Sample Average ◽  
Natural Gas Industry

This paper investigates the levels of technical efficiency in the distribution segment of the natural gas industry in Italy. An empirical analysis is conducted on a sample of 32 gas distributors, while Data Envelopment Analysis (DEA) is performed to calculate efficiency scores. Technical and scale efficiency, and density measurements are also used. Results show that the sample average technical efficiency is about at 75.58%, with a standard deviation of 31.24%. Scale economies are also relevant in the industry as scale efficiency is only 49.28%, with the bulk of companies showing decreasing returns to scale. Furthermore, from graphical analysis apparently no association between technical, scale efficiency and density measurements emerges, indicating that there is no one optimal way to improve efficiency of gas distributing companies.

scholarly journals Does Farm Size and Specialization Matter for Productive Efficiency? Results from Kansas

2011 ◽  
Vol 43 (4) ◽  
pp. 515-528 ◽  
Author(s):  
Amin W. Mugera ◽  
Michael R. Langemeier
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Production Technology ◽  
Returns To Scale ◽  
Productive Efficiency ◽  
Farm Size ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Sample Period ◽  
Analysis Techniques

In this article, we used bootstrap data envelopment analysis techniques to examine technical and scale efficiency scores for a balanced panel of 564 farms in Kansas for the period 1993–2007. The production technology is estimated under three different assumptions of returns to scale and the results are compared. Technical and scale efficiency is disaggregated by farm size and specialization. Our results suggest that farms are both scale and technically inefficient. On average, technical efficiency has deteriorated over the sample period. Technical efficiency varies directly by farm size and the differences are significant. Differences across farm specializations are not significant.

scholarly journals Efficiency of Estonian grain farms in 2000 2004

2008 ◽  
Vol 17 (1) ◽  
pp. 31 ◽  
Author(s):  
N. VASILIEV ◽  
A. ASTOVER ◽  
M. MÕTTE
Keyword(s):  
Parametric Method ◽  
Returns To Scale ◽  
Scale Efficiency ◽  
Small Scale ◽  
Data Envelopment ◽  
The European Union ◽  
New Member States ◽  
Farm Scale ◽  
Grain Farms ◽  
The Eu

The aim of this study is to analyse the efficiency of Estonian grain farms after Estonia’s transition to a market economy and during the accession period to the European Union (EU). The non-parametric method Data Envelopment Analysis (DEA) was used to estimate the total technical, pure technical and scale efficiency of Estonian grain farms in 2000–2004. Mean total technical efficiency varied from 0.70 to 0.78. Of the grain farms 62% are operating under increasing returns to scale. Solely based on the DEA model it is not possible to determine optimum farm scale and the range of Estonian farm sizes operating efficiently is extensive. The most pure technically efficient farms were the smallest and the largest but the productivity of small farms is low compared to larger farms because of their small scale. Therefore, they are the least competitive. Since pre-accession period to the EU, large input slacks of capital have replaced the former excessive use of labour and land. This raises the question about the effects on efficiency of the EU’s investment support schemes in new member states.;

scholarly journals The Efficiency of Non-Bank Financial Intermediaries: Empirical Evidence from Malaysia

2008 ◽  
Author(s):  
Fadzlan Sufian
Keyword(s):  
Risk Factors ◽  
Data Envelopment Analysis ◽  
Empirical Evidence ◽  
Financial Institutions ◽  
Economies Of Scale ◽  
Financial Intermediaries ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Parametric Data ◽  
Dea Method

This paper investigates the performance of Malaysian non-bank financial institutions during the period of 2000-2004. Several efficiency estimates of individual NBFIs are evaluated using the non-parametric Data Envelopment Analysis (DEA) method. The findings suggest that during the period of study, scale inefficiency outweighs pure technical inefficiency in the Malaysian NBFI sector. We find that the merchant banks have exhibited a higher, technical efficiency compared to their peers. The empirical findings suggest that scale efficiency tends to be more sensitive to the exclusion of risk factors, implying that potential economies of scale may be overestimated when risk factors are excluded.  

scholarly journals Does Access to Modern Marketing Channels Improve Dairy Enterprises’ Efficiency? A Case Study of Punjab, Pakistan

1998 ◽  
Vol 17 (1) ◽  
pp. 63-82
Author(s):  
Sana Sadaf ◽  
Khalid Riaz
Keyword(s):  
Returns To Scale ◽  
Marketing Channels ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Land Area ◽  
Fresh Milk ◽  
The Mean ◽  
Using Data ◽  
Variable Returns To Scale

The main objective of this study is to investigate how access to modern marketing channels impacts the efficiency of dairy enterprises. Using data on dairy farms in central Punjab (Sargodha), we carry out a nonparametric data envelopment analysis to measure their technical and scale efficiencies. The results show that, for the sample dairy enterprises, the mean technical efficiency under variable returns to scale was 0.89 while scale efficiency was 0.94. The results of a follow-on regression analysis support the hypothesis that the access to modern marketing channels, where payment for fresh milk is based on measured milk quality (fat content), improved efficiency. We find that efficiency is positively affected by the size of dairy operations, and negatively by the size of operational land area. Moreover, dairy enterprises with smaller herds tend to operate at a suboptimal scale, possibly due to credit and/or land constraints.

scholarly journals Applying data envelopment analysis to operating performance in textile industry

2013 ◽  
Vol 13 (4) ◽  
pp. 99-103 ◽  
Author(s):  
Chia-Hui Ho
Keyword(s):  
Data Envelopment Analysis ◽  
Textile Industry ◽  
Market Competition ◽  
Operating Performance ◽  
Returns To Scale ◽  
Operating Efficiency ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Optimal Operating ◽  
Constant Returns To Scale

Abstract Operating performance could affect the survival and future development of a business that both businesses and business managers would devote to the enhancement of operating performance. Having developed for more than four decades, the consistent upstream, mid-stream and downstream system have been constructed in domestic textile industry. The output value of textiles in Taiwan has exceeded 480 billion NT dollars, which is not a sunset industry, as generally described. The impacts of high labour cost, environmental protection measures and changes of capital market as well as the competition of emerging countries, particularly Mainland China, have made textile industry in Taiwan face great market competition and pressure. Since textiles are regarded as one of the major products in Taiwan, the operating performance could affect the survival of the overall industry. In this case, operating performance survey of textile manufacturers in Taiwan during 2010–2012 is combined with Data Envelopment Analysis and Slack Variable Analysis to measure the total efficiency, pure technical efficiency and scale efficiency of top 12 textile manufacturers in Taiwan, tending to provide the reference of operating efficiency improvement for the manufacturers. The empirical results show that the overall efficiency in the 3 years appears 0.89 averagely. The relative efficiency (1) between two manufacturers, Far Eastern New Century and Ruentex Industries, achieves the optimal operating efficiency, whereas the remaining 10 are comparatively worse. Regarding the analysis of returns to scale, two textile manufacturers present constant returns to scale, with the optimal operating efficiency, whereas the remaining 10 show increasing returns to scale, revealing that expanding the scale could enhance the marginal return and further promote the efficiency.

A Note on the Relationship among the Shape of the Production Possibility Frontier, ‘Returns to Scale’ and ‘Returns to Factors’ under Cobb–Douglas Production Function

2016 ◽  
Vol 4 (2) ◽  
pp. 173-184 ◽  
Author(s):  
Merter Mert
Keyword(s):  
Production Function ◽  
Economies Of Scale ◽  
Returns To Scale ◽  
Scale Economies ◽  
Production Possibility ◽  
Production Possibility Frontier ◽  
The Relationship ◽  
Douglas Production Function

The purpose of this study is to examine relationship among returns to scale, returns to factors and the shape of the production possibility frontier under Cobb–Douglas production function. The study asks the following question: How can production possibility frontier be drawn (a) if returns to scale are constant, increasing and decreasing and (b) if returns to factors are constant, increasing and decreasing? The main finding of the study is as follows: When (a) returns to factors are constant or increasing or decreasing and (b) returns to scale (economies of scale internal to the firm) are constant or increasing or decreasing, the production possibility frontier can be bowed in or bowed out or be linear under certain conditions.

scholarly journals Application of Window Malmquist Index for Examination of Efficiency Change of Czech Commercial Banks

2017 ◽  
Vol 8 (3) ◽  
pp. 173-190
Author(s):  
Iveta Palecková
Keyword(s):  
Commercial Banks ◽  
Returns To Scale ◽  
Malmquist Index ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Efficiency Change ◽  
Average Efficiency ◽  
Index Approach ◽  
Constant Returns To Scale ◽  
Variable Returns To Scale

Abstract The aim of the paper is to apply the Window Malmquist index approach to examine the efficiency change of Czech commercial banks within the period 2004-2013. We used the Data Envelopment Analysis and theWindow Malmquist index approaches to estimate the efficiency change of Czech commercial banks. The average efficiency computed under the assumption of constant returns to scale was 73% and under the assumption of variable returns to scale the value was 83%. We estimated the average positive efficiency growth of Czech commercial banks during the period 2004-2013. We found that average scale efficiency was 88%, which means that Czech commercial banks were of an inappropriate size, especially the largest banks.

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