Comparing regional technical efficiency in UK manufacturing plants: The case of Northern Ireland 1974-1995

This paper uses estimates based on the stochastic frontier production funct ion approach applied to more than 200 four-digit UK manufacturing industrie s, covering the period 1974-95. It is shown that manufacturing plants in No rthern Ireland on average operated at lower levels of technical efficiency when compared to their counterparts in other regions of the UK (and especia lly plants located in South East England). This lower level of efficiency i n the province is analysed both at the aggregate level and the industry lev el. At the industry level the province has fewer plants exhibiting the high est levels of efficiency within most industries, and too few plants open an d close to 'cleanse' manufacturing of the worst plants (and those plants th at do open and close often do not have efficiency levels such as to bring a bout improvements to the aggregate efficiency level). The major conclusion is that Northern Ireland needs to reduce the long tail of weaker plants tha t tend to drag down average efficiency. One way of achieving this is for pl ant turnover to increase whereby less efficient plants are replaced by more efficient plants.