Managerial Efficiency and Firm Size: An Assessment of the Strategic Potential of Italian Manufacturing Industries

Fabrizio Erbetta and Giovanni Fraquelli

L'industria, 2010, issue 3, 397-422

Abstract: The main aim of the study is to examine the relationship between firm size and efficiency in Italian manufacturing industries. Although the literature has sometimes underlined the intrinsic weakness of an excessive fragmentation in industry organization, some authors have recently emphasized the role of medium-sized firms, as potentially benefitting from a mix of «structure» and «flexibility». Using Data Envelopment Analysis (DEA) on a sample of medium and large firms, the study disentangles technical efficiency into managerial and scale components. The results show a higher performance of small-medium class, associated with a more rational use of labour factor and a discipline effect of short-run debt.

Keywords: Firm Size; Efficiency; Manufacturing Firms (search for similar items in EconPapers)
Date: 2010
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