Institutional Complexity and Managerial Efficiency: A Theoretical Model and an Empirical Application

TitleInstitutional Complexity and Managerial Efficiency: A Theoretical Model and an Empirical Application
Publication TypeWorking Paper
Year of Publication2010
AuthorsD. Forrest, M. Jara, D. Paolini
Number2010_05
Keywordsmanagerial efficiency, sport economics, stochastic production frontier
Abstract

This paper studies the effect of the level of a firm?s resources on managerial inefficiency. We motivate our analysis with a theoretical model which predicts that better resourced and therefore more complex institutions tend to be more likely to generate x-inefficiency. The empirical analysis estimates stochastic production frontiers for Chilean and Italian football and finds that, consistent with the theoretical predictions, team performance in the Chilean League is mainly explained by institutional factors related to the level of resources available to a club whereas team performance in the Italian League appears in addition to be related to technical decisions taken by management.

Citation Key2665
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