Technical Efficiency of Enterprise Sector of Georgia

This book investigates the technical efficiency of the enterprise sector in Georgia over the 2000-2004 time period using an unbalanced panel data set, constructed from the enterprise surveys in Georgia. The mean value of the measure of technical efficiency based on the fixed effects from the ¿within¿ estimation of the Cobb-Douglas production function is equal to 0.007. The regression results show that market power and skilled labor is beneficial for firm¿s technical efficiency. There is evidence that state firms are more technically inefficient than private firms ad large and medium firms are doing better compared to their small counterparts. There are significant differences in technical efficiency between firms operating in different sectors. The findings suggest that after the decade of the transition process the enterprise sector of Georgia was operating at the low levels of technical efficiency and adequate microeconomic adjustment was still an urgent issue.