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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Technical Efficiency Analysis of Micro-Enterprises: Theoretical and Methodological Approach of the Stochastic Frontier Production Functions Applied to Nigerian Data
Author:Ajibefun, Igbekele A.ISNI
Periodical:Journal of African Economies
Geographic term:Nigeria
small enterprises
small-scale industry
Development and Technology
Economics and Trade
Politics and Government
External link:https://jae.oxfordjournals.org/content/17/2/161.full.pdf
Abstract:This paper analyses the technical efficiency of micro enterprises in the Nigerian economy, using cross-sectional data collected on micro enterprises selected from block-making, metal-fabricating and sawmilling enterprises in north, southwest and southeast Nigeria. The ability of the Nigerian economy to experience accelerated economic growth both in the short and in the long run depends on the exploitation of the potential within the micro enterprises sector of the economy. It then becomes important to study the current level of technical efficiency within the micro enterprises subsector. The paper uses the stochastic frontier production functions for its analysis. The results show that the enterprises have a varying level of technical efficiency across enterprises, across scales of operation and across regions. Of the three geographical regions, both the least and the highest technical efficiencies come from micro enterprises located in the southeastern regions of Nigeria. The results indicate that while the level of education, level of investment and number of employees positively and significantly affect the level of technical efficiency, age of enterprise, as well as age of enterprise operator/decision-maker, negatively influences the level of technical efficiency. The results of tests of hypotheses show that there is no significant difference in technical efficiency across the scale of operation, but the hypothesis of no significant difference in technical efficiency across geographical zones is rejected. Bibliogr., sum. [Journal abstract, edited]