The Relationship between Firm Size and Technical Efficiency in East Africa Manufacturing Firms
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Date
2010
Journal Title
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Abstract
The main objective of this study was to establish the relationship between firm size and technical efficiency in East Africa
manufacturing firms. This study used a two step methodology to examine the relationships between technical efficiency and
firm size in east Africa manufacturing firms. In the first step, technical efficiency measures were calculated using DEA
approach. Secondly, using the GLS technique, a technical efficiency equation was estimated to investigate whether technical
efficiency is increasing in firm size. Contrary to our expectation, the results showed a negative association between firm size
and technical efficiency in both Ugandan and Tanzanian manufacturing firms. The existence of a positive association
between size squared and technical efficiency and a negative association between firm size and technical efficiency in
Ugandan and Tanzanian manufacturing firms suggests an inverted U- relationship between firm size and technical efficiency
in these countries.
Description
Keywords
Firm size, Technical efficiency, Manufacturing firms
Citation
Aggrey, N., Eliab, L. and Joseph, S., 2010. The Relationship between Firm Size and Technical Efficiency in East Africa Manufacturing Firms. Journal of Sustainable Development in Africa, 12(4), pp.226-236.