Technical Efficiency Measurement within the Ivorian Manufacturing Sector: a Data Envelopment Analysis Approach

Abstract

The African industrial structure is characterised by a strong firm-size heterogeneity with a co-existence of small if not micro-enterprises of the informal sector and large formal organisations operating with a modern technology. In this paper, we investigate the technical efficiency of Ivorian manufacturing firms in four sectors of economic activity: textile and garment, metal products, wood and furniture, food processing. The DEA production frontier is the non-parametric methodology to which we refer to. Efficiency scores are calculated by following the four-stage procedure as presented by Fried, Schmidt and Yaisawarng (1999). In other words, the initial DEA scores are adjusted to take into account the impact of the external operating environment on the volume of the input use. Technical efficiency are then decomposed into three elements: the pure managerial effect, the impact of the production scale, but also a technological effect capturing the potential gain that could result from the adoption of the modern technology by small informal firms.formal-informal sectors, manufacturing sector, non parametric frontier, cote d'ivoire, Technical efficiency