Size and Managerial EfficiencyEvidence from New Entrance Firms of Iran’s Manufacturing Industry

Although economic literature is replete with studies that support large scale firms because of economics of scale theory but in other view, especially in terms of management, large firms can not necessarily be regarded as an efficient size. It is because firm’s management ability and control decrease with expanding the firm’s size and this in turn can affect negatively on the performance of firms in the next step. On this basis, it is expected a significant correlation between firm size and managerial efficiency and hence, this paper attempts to study such connection in the manufacturing industries in Iran. For this purpose, using DEA technique, changes in firm size and consequently the changes of managerial efficiency have been tested in other non-metallic mineral products as a one the largest industry in Iran during the years of Fourth Development Plan (۲۰۰۵-۱۰) which data were available. With emphasis at ۴- digit industry levels, the results of this paper indicate that increasing firm size cause better performance in managerial efficiency and hence, it can be said that economies of scale in this industry is still important. This means that firms in this industry is much less than the Minimum Efficient Size, even in terms of managerial efficiency.

کلیدواژه ها:

Size ، Managerial efficiency ، DEA ، Other non-metallic mineral products ، Iran