Determining of Economic Efficiency of Industry of Iran during 1995-2010 (Metafrontier Approach)

Document Type : Research Paper


1 M.A. of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran,

2 Assistant Professor at Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran

3 Associate Professor at Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran


Given the Importance of the Notion of Efficiency in the Country's Economic Growth, Measuring the Efficiency and the Technology Gap for Various Industries in order to achieve the Best Possible Resource Assignment, Following the Declared Policy Goals, is of Particular Importance for Those Countries, such as Iran, which are now at the early Stages of the Industrialization Process. Hence the Present Thesis is devoted to Determining the Efficiency Cost and the Metatechnology Ratio of the Industrial Activities in Iran. This is done for Three Groups with Different Levels of Technology during 1995-2010; we Use the Cost Frontier Function Based on the Likelihood Ratio Test between the Cobb- Douglas and Translog Functions and also the Stochastic Frontier Analysis and the Meta-Frontier approach. The Results Indicate that the Average Percentage of the Economic Efficiency of These Groups Ranges from 59.72 to 95.26; the Average Meta-Frontier Ratio from 0.5184 to 0.9782, and also the Average Percentage of the Meta-Frontier Efficiency Ranges from 30.79 to 87.37. The Results also show that the Average Percentage of Group and Meta-Frontier Economic Efficiency and also the Average Percentage of Metatechnology Ratio Corresponding to the Industries linked to Machinery Rank Better than those Industries Linked to Agriculture, Mining, Energy and Fuel. On the other hand, the Growth Process of the Metatechnology Ratio is clearer for the Industries Linked to Mining, Energy and Fuel during the Study Stage.
JEL Classification: C23, C61, D24, L23


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