Giovanni Fraquelli
(Università di Torino - Ceris-Cnr)

Piercarlo Frigero
(Università di Torino)

Fulvio Sugliano
(Ceris-Cnr)

This paper assesses the role of competition in explaining the efficiency in the Italian manufacturing. Technical efficiency differentials have been measured by applying Data Evelopment Analysis (D.E.A.) methods on a panel of 420 firms from 32 industries at 3- digit level, over the period 1983-1992. The analysis shows that a tougher competitive environment is efficiency enhancing . Consistent with previous empirical evidence we find a negative link between efficiency and concentration. Moreover efficiency declines more slowly when the level of concentration is highest, suggesting a non-linear relationship. The results have policy implications. The undergoing process of liberalisation and privatisation in Italy should take into account the beneficial effects of a more competitive environment.

Key words: Competition, Technical efficiency
Jel Classification: L1, D24

Elaborazioni eseguite presso il CERIS – CNR di Torino. Gli autori sono grati a Davide Vannoni e Laura Rondi per i preziosi suggerimenti. Un ringraziamento particolare a Maria Zittino e Silvana Zelli per la collaborazione nel rilevare alcune serie di dati.