Managerial efficiency and size: an assessment of strategic potential of Italian manufacturing firms

This paper examines the efficiency differentials with reference to a large sample of Italian manufacturing enterprises. The literature on the subject has frequently emphasized the weakness inherent in a fragmented industrial system. Recently, however, some authors have extensively re-evaluated the role of medium-sized companies, as characterised by a potentially winning combination of “structure” and “flexibility”. Applying the nonparametric DEA (Data Envelopment Analysis) approach to a set of medium and large firms, the results provide an overview of the disaggregated efficiency components. The medium-small business seems to benefit from the best conditions of efficiency, attributable to a more rational use of labour as well as a more disciplining role of external financial market.