The Impact of Innovation, Firm Growth and Perceptions on Technical and Scale Efficiency

Abstract

This paper uses a two-stage approach to analyse efficiency and productivity of Dutch glasshouse firms over the period 1991-1998. The first stages uses DEA to determine productivity growth and technical and scale efficiency; the second stage applies a TOBIT model to explain technical and scale efficiency; OLS is used to explain productivity change. The main explanatory variables are structural changes (innovation and firm growth), socio-economic variables and perceptions classified according to the SWOTanalysis. Variables that are stable over time, i.e. socio-economic variables of the firm and perceptions of the entrepreneur explain the level of technical and scale efficiency. Innovation and firm growth are important factors in the explanation of productivity growth.