Assessment of the «district effect» through non-radial measures of technical efficiency

Abstract

The aim of this work is to measure the Industrial Marshallian District (IMD) effect through non-radial measures of technical efficiency. Taking as reference the spatial location of each firm (inside or outside of the IMD), a valuable information can be obtained to assess whether there exist competitive advantages (Porter’s approach) derived from firms agglomerations, as well as their intensity and typology. Recent literature on this topic uses radial measures of technical efficiency. This study tries to overcome some of the limitations involved in this kind of studies, especially as they obtain a unique indicator for the efficiency of all inputs. The methodology used here permits to calculate an efficiency index for each of the inputs. This information is especially important for the analysis of the territorial externalities since contributes to the identification and evaluation of the effects derived from the external economies in every of the aspects of the firms activity. An empirical application is carried out for a sample of Spanish Small and Medium industrial Firms (SMF).

Keywords

• Marshallian agglomerations
• SMF
• industrial districts
• territorial externalities
• non-radial measures of efficiency
• DEA
• linear programming