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A three-stage DEA-SFA efficiency analysis of labour-owned and mercantile firms

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  • This paper undertakes a three-stage DEA-SFA (Data Envelopment Analysis / Stochastic Frontier Analysis) efficiency analysis of labour-owned (LOF) and mercantile (PCF) firms to assess whether variations in the productive efficiency and in the total factor productivity of LOFs and PCFs are explainable by differences in their capital-ownership configuration. The model first purges, from each firm's performance, the impact of statistical noise and of environmental factors and yields increasing average efficiency estimates of the firms under study. Then, it tests the hypothesis that the average firm, be it LOF or PCF, is equally efficient and exhibits comparable levels of productivity growth. The evidence presented supports the proposition that differences in the capital-ownership configuration do not play a very significant role in their performance efficiency or in their productivity growth and whatever productivity growth occurs is attributable largely to innovation rather than to catching up to the efficient firms.
    Mathematics Subject Classification: Primary: 58F15, 58F17; Secondary: 53C35.


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