DECOMPOSING REGIONAL EFFICIENCY* |
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| Authors: | Axel Schaffer Léopold Simar Jan Rauland |
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| Institution: | 1. Department of Economics and Organizational Science, University of the Federal Armed Forces Munich, and Institute for Economic Policy Research, Karlsruhe Institute of Technology, Building 20.14, DE 76128 Karlsruhe, Germany. E‐mail: schaffer@kit.edu;2. Institut de Statistique, Université Catholique de Louvain, 20 voie du Roman Pays, B 1348 Louvain‐la‐Neuve, Belgium. E‐mail: leopold.simar@uclouvain.be;3. Institute for Economic Policy Research, Karlsruhe Institute of Technology, Building 20.14, DE 76128 Karlsruhe, Germany. E‐mail: janrauland@gmail.com |
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| Abstract: | ABSTRACT Applying an outlier robust extension of the data envelopment analysis (DEA) followed by a geoadditive regression analysis, this study identifies and decomposes the efficiency of 439 German regions in using infrastructure and human capital. The findings show that the regions’ efficiency is driven by a spatial and a nonspatial, arguably structural factor. As a consequence, concrete regional funding schemes, shaped by best practice results, might not be appropriate for all regions. Instead, a more differentiated funding scheme that accounts for both spatial and structural factors seems more promising. |
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