Internationally traded sectors are capable of transferring wealth into a region and are,
therefore, central to the development of economic prosperity. This report examines
the productive efficiency of important internationally traded sectors across
manufacturing and advanced services. The Small Open Economies (SOEs) of Republic
of Ireland, Singapore and New Zealand are selected as comparator economies for
Northern Ireland. These are developed economies for which the sectors of Banking,
Chemical and Food serve as internationally traded sectors of reference. The report
estimates efficiency over the period of the mid 2000’s within each location and also
across the locations, enabling a comparison of Northern Ireland’s efficiency against the
other SOEs.
Data Envelopment Analysis (DEA) is used to measure technical efficiency, scale
efficiency, and the development of efficiency over time for each sector and location.
This permits analyses, within and across our selected SOEs, of the extent to which (a)
leading firms maximise their output given their inputs - technical efficiency; (b) leading
firms operate at a scale of production appropriate to producing output at relatively
low cost - scale efficiency; and (c) how the productivity performance across such firms
has changed over time.