Tehnička (ne)efikasnost prerađivačke industrije Srbije u periodu 2010–2018 – kakav je efekat stranih investicija?
TECHNICAL (IN)EFFICIENCY OF THE SERBIA MANUFACTURING INDUSTRY IN 2010-2018 – WHAT IS THE EFFECT OF FOREIGN INVESTMENT?

Author(s): Ivan Nikolić
Subject(s): Economy, National Economy, Business Economy / Management
Published by: Институт друштвених наука
Keywords: technical efficiency; stochastic frontier; foreign investment; manufacturing industry
Summary/Abstract: The aim of the analysis is to quantify the technical (in)efficiency of the Serbian manufacturing industry in 2010-2018, considering the impact of the high FDI inflow in recent years. The methodological framework relies on stochastic frontier analysis. The obtained results indicate that Serbia lost half of the potential output of the manufacturing sector due to technical inefficiency. Foreign investment reduces technical inefficiency. In particular, the level of technical inefficiency is reduced by, on average, 2.2% per every 1 percent increase in foreign ownership. The finding is directly supported by the results at the level of the observed branches of manufacturing sector. The greatest increase in technical efficiency is in the branches with a high share of foreign ownership, such as: production of motor vehicles, production of chemicals, and production of wire and cable equipment.

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