Analysing the technical efficiency of the Hungarian manufacturing industry

  • Dániel Molnár MATE
  • Tibor Bareith HUN-REN KRTK
  • Lajos Baráth HUN-REN KRTK

Abstract

Our study examines the technical efficiency of the Hungarian manufacturing industry over the period between 2013–2022, using stochastic frontier (Stochastic Frontier Analysis, SFA) models that allow for the treatment of unobserved heterogeneity among firms. In addition, we decompose output growth into the contributions of input growth and productivity growth, and further break down changes in productivity into the effects of technological change and changes in technical efficiency. The results indicate that growth during the examined period was primarily input-driven, while technological progress (1.4% per year) also had a favourable impact on productivity. However, improvements in technical efficiency were moderate, with significant differences across firm size categories, suggesting that there is substantial potential for further enhancing sector efficiency, especially among small and medium-sized enterprises. Furthermore, according to our model, higher export orientation exerts a positive influence on corporate efficiency. Technological development and technical efficiency can be supported through different policy tools: technological progress can be fostered mainly by promoting innovation and R&D, whereas improving technical efficiency can be achieved by strengthening training and advisory systems. Consequently, our findings provide an important starting point for designing measures aimed at boosting the competitiveness and productivity of the manufacturing sector.

Author Biographies

Dániel Molnár, MATE

PhD-hallgató

Tibor Bareith, HUN-REN KRTK

tudományos munkatárs, HUN-REN Közgazdaság- és Regionális Tudományi Kutatóközpont

Lajos Baráth, HUN-REN KRTK

 tudományos főmunkatárs, HUN-REN Közgazdaság- és Regionális Tudományi Kutatóközpont

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Published
2025-04-15
How to Cite
MolnárD., BareithT., & BaráthL. (2025). Analysing the technical efficiency of the Hungarian manufacturing industry. Hungarian Economic Review, 72(4), 369-387. Retrieved from https://ojs3.mtak.hu/index.php/kszemle/article/view/18748
Section
Tanulmány