An evaluation of a production performance across the selected EU regions A stochastic frontier approach to Malmquist productivity index

The paper deals with production performance evaluation of the EU selected regions in the period 2000 - 2011. We estimate a translog stochastic production frontier using the true fixed-effects methods. We detect statistically significant savings with respect to the technical progress in capital input and consumption with respect to the technical progress in labor input. We evaluate the performance based on the Malmquist productivity index. We analyze these productivity patterns through technological progress and technical efficiency. According to the results, the researched region can be classified into four quadrants by causes of changes in productivity. Results showed that average productivity growth was 1.5% mainly due to the technological progress 1% and a slight influence of technical efficiency change 0.5%.