Next Article in Journal
Parameter Estimation and Hypothesis Testing of Geographically Weighted Multivariate Generalized Poisson Regression
Next Article in Special Issue
Dispersion Trading Based on the Explanatory Power of S&P 500 Stock Returns
Previous Article in Journal
On the Difference of Coefficients of Starlike and Convex Functions
Previous Article in Special Issue
The Net Worth Trap: Investment and Output Dynamics in the Presence of Financing Constraints
Open AccessArticle

Non-Parametric Analysis of Efficiency: An Application to the Pharmaceutical Industry

Department of Economic Analysis, Facultad CC Económicas y Empresariales, UNED, Senda del Rey 11, 28040 Madrid, Spain
*
Author to whom correspondence should be addressed.
Mathematics 2020, 8(9), 1522; https://doi.org/10.3390/math8091522
Received: 29 July 2020 / Revised: 27 August 2020 / Accepted: 31 August 2020 / Published: 7 September 2020
(This article belongs to the Special Issue Quantitative Methods for Economics and Finance)
Increases in the cost of research, specialization and reductions in public expenditure in health are changing the economic environment for the pharmaceutical industry. Gains in productivity and efficiency are increasingly important in order for firms to succeed in this environment. We analyze empirically the performance of efficiency in the pharmaceutical industry over the period 2010–2018. We work with microdata from a large sample of European firms of different characteristics regarding size, main activity, country of origin and other idiosyncratic features. We compute efficiency scores for the firms in the sample on a yearly basis by means of non-parametric data envelopment analysis (DEA) techniques. Basic results show a moderate average level of efficiency for the firms which encompass the sample. Efficiency is higher for companies which engage in manufacturing and distribution than for firms focusing on research and development (R&D) activities. Large firms display higher levels of efficiency than medium-size and small firms. Our estimates point to a decreasing pattern of average efficiency over the years 2010–2018. Furthermore, we explore the potential correlation of efficiency with particular aspects of the firms’ performance. Profit margins and financial solvency are positively correlated with efficiency, whereas employee costs display a negative correlation. Institutional aspects of the countries of origin also influence efficiency levels. View Full-Text
Keywords: pharmaceutical industry; scale economies; profitability; biotechnological firms; non-parametric efficiency; productivity; DEA pharmaceutical industry; scale economies; profitability; biotechnological firms; non-parametric efficiency; productivity; DEA
Show Figures

Figure 1

MDPI and ACS Style

Díaz, R.F.; Sanchez-Robles, B. Non-Parametric Analysis of Efficiency: An Application to the Pharmaceutical Industry. Mathematics 2020, 8, 1522.

AMA Style

Díaz RF, Sanchez-Robles B. Non-Parametric Analysis of Efficiency: An Application to the Pharmaceutical Industry. Mathematics. 2020; 8(9):1522.

Chicago/Turabian Style

Díaz, Ricardo F.; Sanchez-Robles, Blanca. 2020. "Non-Parametric Analysis of Efficiency: An Application to the Pharmaceutical Industry" Mathematics 8, no. 9: 1522.

Find Other Styles
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Search more from Scilit
 
Search
Back to TopTop