Measuring technical efficiency using the example of construction companies

Marek Vochozka, Jan Váchal and Jarmila Straková

Ekonomika a Management, 2015, vol. 2015, issue 2

Abstract: This paper presents one of the possible approaches for measuring business performance, or more precisely, the measurement of technical efficiency for a set of construction companies. The theoretical basis of technical efficiency is defined. This provides information on the level of utilization of factors of production by a company whereby it is possible to identify the potential of the business and its potential losses. Single-factor linear production functions are used for this purpose. The test file includes 15,189 construction companies from all regions of the Czech Republic. A production function for the observed set of companies is defined, as are the strengths of the individual production parameters. A specification of the derived production function according to the year and relevant region is also given. The set method allows us to predict the production functions in the respective regions and their average production at the set structure of production factors which expresses the specifics of the respective region.

Keywords: Business performance; Technical efficiency; Single-factor production function; Business performance; Technical efficiency; Single-factor production function (search for similar items in EconPapers)
JEL-codes: G30 (search for similar items in EconPapers)
Date: 2015
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