The Evolution of Technical Efficiency in the Northern Ireland Manufacturing Sector, 1973–1985

This paper uses a stochastic frontier production function approach to measure technical efficiency in firms in Northern Ireland. Firm level census of production panel data were used to examine how efficiency in firms changed over the period 1973–1985. Once estimates of efficiency were made, the causes of inefficiency based on characteristics of firms were examined. The results indicate that efficiency in Northern Ireland has improved significantly over‐time. The largest increases in efficiency were in indigenously owned firms. The results suggest that many Northern Ireland owned firms were ‘catching‐up’ in terms of efficiency with foreign owned firms over the period.