Measuring the efficiency and productivity change of municipalities:empirical evidence from Greek municipalities over the time period 2013-2016

Abstract

This paper investigates the relative efficiency and productivity change of municipalities of Greece (regions of Thessaly and Central Greece), during the period 2013-2016. It implements Data Envelopment Analysis (D.E.A.) and Malmquist analysis. Additionally it estimates the effects of the environmental factors on the efficiency using Regression Analysis. The empirical analysis reveals that efficiency and productivity values have gradually improved after the latest reform of Local Government and under restrictive fiscal policy. Τhe average efficiency under constant or variable returns to scale is 0.772 and 0.878 respectively and the mean scale efficiency is 0.883. The total factor productivity has risen by an annual average of 3.3% relatively to the base year 2013. Environmental variables such as type of municipality and population density had a statistically significant positive effect on efficiency. The results of the empirical analysis are consistent to the findings from studies that concern European and other countries. The findings provide benchmarks for policy evaluation and suggestions for region-based approaches. © 2020 Hellenic Association of Regional Scientists. All rights reserved.