Size, R&D and Technical Efficiency in the Industrial Sector of the Spanish Economy
Dr M Isabel Pisa-Bo, Dr Rosario Sanchez-Perez

Using the stochastic frontier method, technical inefficiency values are obtained for each company, with these values, the pattern of associations is built. The information analysis is carried out using a strategy based on multivariate methods of interdependence. A factorial analysis of multiple correspondences and a cluster analysis were used. The data source is that published in the Spanish Survey on Business Strategies (SBS) and collected by the SEPI Foundation. The results permit the characterizing of three groups of firms defined according to their level of efficiency/inefficiency. Companies that belong to the efficient cluster invest more in R&D, have higher labor costs, belong to the automobile (and associated) industry, and have more than 228 employees. High labor costs (in excess of 40,000 per year) are a common feature related to low technical inefficiency. The high level of inefficiency relates to small firms, companies with 54 workers or less, and firms with relatively low labor costs, presenting levels lower than 29,805.3 per employee per year; and firms without training costs and without investment in R & D. Our results obtain empirical evidence in favor of the strong correlation among size of firms, investment in R&D and labor cost per worker as determinant factor to achieve great levels of technical efficiency.

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