Halkos, George and Tzeremes, Nickolaos (2011): A conditional full frontier approach for investigating the AverchJohnson effect.

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Abstract
This paper applies a probabilistic approach in order to develop conditional and unconditional Data Envelopment Analysis (DEA) models for the measurement of sectors’ input oriented technical and scale efficiency levels for a sample of 23 Greek manufacturing sectors. In order to capture the Averch and Johnson effect (AJ effect), we measure sectors’ efficiency levels conditioned on the number of companies competing within the sectors. Particularly, various DEA models have been applied alongside with bootstrap techniques in order to determine the effect of competition conditions on sectors’ inefficiency levels. Additionally, this study illustrates how the recent developments in efficiency analysis and statistical inference can be applied when evaluating the effect of regulations in an industry. The results reveal that sectors with fewer numbers of companies appear to have greater scale and technical inefficiencies due to the existence of the AJ effect.
Item Type:  MPRA Paper 

Original Title:  A conditional full frontier approach for investigating the AverchJohnson effect 
Language:  English 
Keywords:  AverchJohnson effect; Industry regulations; Manufacturing sectors; Nonparametric analysis 
Subjects:  L  Industrial Organization > L2  Firm Objectives, Organization, and Behavior > L25  Firm Performance: Size, Diversification, and Scope C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C14  Semiparametric and Nonparametric Methods: General L  Industrial Organization > L1  Market Structure, Firm Strategy, and Market Performance > L10  General L  Industrial Organization > L5  Regulation and Industrial Policy > L59  Other 
Item ID:  35491 
Depositing User:  G.E. Halkos 
Date Deposited:  20. Dec 2011 07:26 
Last Modified:  19. Feb 2013 10:35 
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URI:  http://mpra.ub.unimuenchen.de/id/eprint/35491 